Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2016 | Jul. 27, 2016 | |
Document and Entity Information | ||
Entity Registrant Name | CubeSmart | |
Entity Central Index Key | 1,298,675 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 179,292,330 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q2 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
ASSETS | ||
Storage facilities | $ 3,861,096 | $ 3,467,032 |
Less: Accumulated depreciation | (652,657) | (594,049) |
Storage facilities, net (including VIE assets of $203,341 and $136,274, respectively) | 3,208,439 | 2,872,983 |
Cash and cash equivalents | 3,423 | 62,869 |
Restricted cash | 9,017 | 24,600 |
Loan procurement costs, net of amortization | 2,475 | 2,800 |
Investment in real estate venture, at equity | 99,915 | 97,281 |
Other assets, net | 39,240 | 43,631 |
Total assets | 3,362,509 | 3,104,164 |
LIABILITIES AND EQUITY | ||
Unsecured senior notes, net | 742,402 | 741,904 |
Revolving credit facility | 150,000 | |
Unsecured term loans, net | 398,466 | 398,183 |
Mortgage loans and notes payable, net | 138,716 | 111,455 |
Accounts payable, accrued expenses and other liabilities | 96,795 | 85,034 |
Distributions payable | 39,449 | 38,685 |
Deferred revenue | 19,868 | 17,519 |
Security deposits | 402 | 403 |
Total liabilities | 1,586,098 | 1,393,183 |
Noncontrolling interests in the Operating Partnership | 68,581 | 66,128 |
Commitments and contingencies | ||
Equity | ||
7.75% Series A Preferred shares $.01 par value, 3,220,000 shares authorized, 3,100,000 shares issued and outstanding at June 30, 2016 and December 31, 2015, respectively | 31 | 31 |
Common shares $.01 par value, 400,000,000 shares authorized, 178,249,897 and 174,667,870 shares issued and outstanding at June 30, 2016 and December 31, 2015, respectively | 1,782 | 1,747 |
Additional paid in capital | 2,332,742 | 2,231,181 |
Accumulated other comprehensive loss | (4,623) | (4,978) |
Accumulated deficit | (627,689) | (584,654) |
Total CubeSmart shareholders' equity | 1,702,243 | 1,643,327 |
Noncontrolling interests in subsidiaries | 5,587 | 1,526 |
Total equity | 1,707,830 | 1,644,853 |
Total liabilities and equity | $ 3,362,509 | $ 3,104,164 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Storage facilities, net | $ 3,208,439 | $ 2,872,983 |
Series A Preferred shares, percentage | 7.75% | 7.75% |
Series A Preferred shares, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Series A Preferred shares, shares authorized | 3,220,000 | 3,220,000 |
Series A Preferred shares, shares issued | 3,100,000 | 3,100,000 |
Series A Preferred shares, shares outstanding | 3,100,000 | 3,100,000 |
Common shares, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common shares, shares authorized | 400,000,000 | 400,000,000 |
Common shares, shares issued | 178,249,897 | 174,667,870 |
Common shares, shares outstanding | 178,249,897 | 174,667,870 |
VIE | ||
Storage facilities, net | $ 203,341 | $ 136,274 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
REVENUES | ||||
Rental income | $ 111,538 | $ 96,803 | $ 216,535 | $ 188,359 |
Other property related income | 12,643 | 11,385 | 24,406 | 21,928 |
Property management fee income | 2,345 | 1,683 | 4,456 | 3,272 |
Total revenues | 126,526 | 109,871 | 245,397 | 213,559 |
OPERATING EXPENSES | ||||
Property operating expenses | 41,607 | 38,210 | 81,826 | 75,641 |
Depreciation and amortization | 41,448 | 38,086 | 80,804 | 75,981 |
General and administrative | 7,891 | 7,114 | 16,119 | 14,287 |
Acquisition related costs | 2,563 | 753 | 4,905 | 1,263 |
Total operating expenses | 93,509 | 84,163 | 183,654 | 167,172 |
OPERATING INCOME | 33,017 | 25,708 | 61,743 | 46,387 |
Interest: | ||||
Interest expense on loans | (12,200) | (10,868) | (24,284) | (21,925) |
Loan procurement amortization expense | (611) | (659) | (1,216) | (1,205) |
Equity in losses of real estate ventures | (724) | (100) | (1,236) | (338) |
Other | 901 | (208) | 1,231 | (524) |
Total other expense | (12,634) | (11,835) | (25,505) | (23,992) |
NET INCOME | 20,383 | 13,873 | 36,238 | 22,395 |
NET (INCOME) LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS | ||||
Noncontrolling interests in the Operating Partnership | (227) | (161) | (399) | (252) |
Noncontrolling interest in subsidiaries | 268 | 12 | 335 | 15 |
NET INCOME ATTRIBUTABLE TO THE COMPANY | 20,424 | 13,724 | 36,174 | 22,158 |
Distribution to preferred shareholders | (1,502) | (1,502) | (3,004) | (3,004) |
NET INCOME ATTRIBUTABLE TO THE COMPANY'S COMMON SHAREHOLDERS | $ 18,922 | $ 12,222 | $ 33,170 | $ 19,154 |
Basic earnings per share attributable to common shareholders (in dollars per share) | $ 0.11 | $ 0.07 | $ 0.19 | $ 0.12 |
Diluted earnings per share attributable to common shareholders (in dollars per share) | $ 0.11 | $ 0.07 | $ 0.19 | $ 0.11 |
Weighted-average basic shares outstanding (in shares) | 177,880 | 166,683 | 176,838 | 166,096 |
Weighted-average diluted shares outstanding (in shares) | 179,221 | 168,224 | 178,172 | 167,655 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||||
NET INCOME | $ 20,383 | $ 13,873 | $ 36,238 | $ 22,395 |
Other comprehensive (loss) income: | ||||
Unrealized losses on interest rate swaps | (581) | (357) | (2,235) | (2,686) |
Reclassification of realized losses on interest rate swaps | 1,268 | 1,572 | 2,594 | 3,137 |
Unrealized loss on foreign currency translation | 268 | (69) | ||
OTHER COMPREHENSIVE LOSS | 687 | 1,483 | 359 | 382 |
COMPREHENSIVE INCOME | 21,070 | 15,356 | 36,597 | 22,777 |
Comprehensive income attributable to noncontrolling interests in the Operating Partnership | (235) | (180) | (403) | (256) |
Comprehensive loss attributable to noncontrolling interests in subsidiaries | 268 | 5 | 335 | 18 |
COMPREHENSIVE INCOME ATTRIBUTABLE TO THE COMPANY | $ 21,103 | $ 15,181 | $ 36,529 | $ 22,539 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) shares in Thousands, $ in Thousands | Total Shareholders' Equity | Common Shares | Preferred Shares | Additional Paid-in Capital | Accumulated Other Comprehensive (Loss) Income | Accumulated Deficit | Noncontrolling Interest in Subsidiaries | Noncontrolling Interests in Operating Partnership | Total |
Balance at Dec. 31, 2014 | $ 1,448,026 | $ 1,639 | $ 31 | $ 1,974,308 | $ (8,759) | $ (519,193) | $ 1,592 | $ 1,449,618 | |
Balance (in shares) at Dec. 31, 2014 | 163,957 | 3,100 | |||||||
Balance of Noncontrolling Interests in the Operating Partnership at Dec. 31, 2014 | $ 49,823 | ||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Contributions from noncontrolling interests in subsidiaries | 178 | 178 | |||||||
Issuance of common shares, net | 56,477 | $ 24 | 56,453 | 56,477 | |||||
Issuance of common shares, net (in shares) | 2,339 | ||||||||
Issuance of restricted shares | 1 | $ 1 | 1 | ||||||
Issuance of restricted shares (in shares) | 154 | ||||||||
Issuance of OP Units | 500 | ||||||||
Conversion from units to shares | 296 | 296 | (296) | 296 | |||||
Conversion from units to shares (in shares) | 12 | ||||||||
Exercise of stock options | 9,359 | $ 10 | 9,349 | 9,359 | |||||
Exercise of stock options (in shares) | 976 | ||||||||
Amortization of restricted shares | (36) | (36) | (36) | ||||||
Share compensation expense | 491 | 491 | 491 | ||||||
Adjustment for noncontrolling interest in the Operating Partnership | (2,913) | (2,913) | 2,913 | (2,913) | |||||
Net income (loss) | 22,158 | 22,158 | (15) | 22,143 | |||||
Net income (loss) | 252 | ||||||||
Other comprehensive income (loss), net | 381 | 381 | (3) | 378 | |||||
Other comprehensive income (loss), net | 4 | ||||||||
Preferred share distributions | (3,004) | (3,004) | (3,004) | ||||||
Common share distributions | (53,433) | (53,433) | (724) | (53,433) | |||||
Balance at Jun. 30, 2015 | 1,477,803 | $ 1,674 | $ 31 | 2,040,861 | (8,378) | (556,385) | 1,752 | 1,479,555 | |
Balance (in shares) at Jun. 30, 2015 | 167,438 | 3,100 | |||||||
Balance of Noncontrolling Interests in the Operating Partnership at Jun. 30, 2015 | 52,472 | ||||||||
Balance at Dec. 31, 2014 | 1,448,026 | $ 1,639 | $ 31 | 1,974,308 | (8,759) | (519,193) | 1,592 | 1,449,618 | |
Balance (in shares) at Dec. 31, 2014 | 163,957 | 3,100 | |||||||
Balance of Noncontrolling Interests in the Operating Partnership at Dec. 31, 2014 | 49,823 | ||||||||
Balance at Dec. 31, 2015 | 1,643,327 | $ 1,747 | $ 31 | 2,231,181 | (4,978) | (584,654) | 1,526 | 1,644,853 | |
Balance (in shares) at Dec. 31, 2015 | 174,668 | 3,100 | |||||||
Balance of Noncontrolling Interests in the Operating Partnership at Dec. 31, 2015 | 66,128 | 66,128 | |||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Contributions from noncontrolling interests in subsidiaries | 4,396 | 4,396 | |||||||
Issuance of common shares, net | 88,602 | $ 28 | 88,574 | 88,602 | |||||
Issuance of common shares, net (in shares) | 2,820 | ||||||||
Issuance of restricted shares | 1 | $ 1 | 1 | ||||||
Issuance of restricted shares (in shares) | 121 | ||||||||
Issuance of OP Units | 1,500 | ||||||||
Exercise of stock options | 12,199 | $ 6 | 12,193 | 12,199 | |||||
Exercise of stock options (in shares) | 641 | ||||||||
Amortization of restricted shares | 171 | 171 | 171 | ||||||
Share compensation expense | 623 | 623 | 623 | ||||||
Adjustment for noncontrolling interest in the Operating Partnership | (1,469) | (1,469) | 1,469 | (1,469) | |||||
Net income (loss) | 36,174 | 36,174 | (335) | 35,839 | |||||
Net income (loss) | 399 | ||||||||
Other comprehensive income (loss), net | 355 | 355 | 355 | ||||||
Other comprehensive income (loss), net | 4 | ||||||||
Preferred share distributions | (3,004) | (3,004) | (3,004) | ||||||
Common share distributions | (74,736) | (74,736) | (919) | (74,736) | |||||
Balance at Jun. 30, 2016 | $ 1,702,243 | $ 1,782 | $ 31 | $ 2,332,742 | $ (4,623) | $ (627,689) | $ 5,587 | 1,707,830 | |
Balance (in shares) at Jun. 30, 2016 | 178,250 | 3,100 | |||||||
Balance of Noncontrolling Interests in the Operating Partnership at Jun. 30, 2016 | $ 68,581 | $ 68,581 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Operating Activities | ||
Net income | $ 36,238 | $ 22,395 |
Adjustments to reconcile net income to cash provided by operating activities: | ||
Depreciation and amortization | 82,020 | 77,186 |
Equity in losses of real estate ventures | 1,236 | 338 |
Equity compensation expense | 794 | 455 |
Accretion of fair market value adjustment of debt | (504) | (803) |
Changes in other operating accounts: | ||
Restricted cash | 272 | 190 |
Other assets | (3,630) | (3,896) |
Accounts payable and accrued expenses | 5,891 | 3,306 |
Other liabilities | 1,660 | 1,517 |
Net cash provided by operating activities | 123,977 | 100,688 |
Investing Activities | ||
Acquisitions of storage facilities | (235,577) | (85,627) |
Additions and improvements to storage facilities | (13,261) | (11,874) |
Development costs | (94,496) | (37,026) |
Investment in real estate ventures | (7,586) | |
Cash distributed from real estate ventures | 3,716 | 3,000 |
Fundings of notes receivable | (4,100) | |
Change in restricted cash | 137 | (63) |
Net cash used in investing activities | (347,067) | (135,690) |
Proceeds from: | ||
Revolving credit facility | 655,100 | 378,700 |
Principal payments on: | ||
Revolving credit facility | (505,100) | (295,100) |
Mortgage loans and notes payable | (13,659) | (55,451) |
Loan procurement costs | (2,283) | |
Proceeds from issuance of common shares, net | 88,603 | 56,478 |
Exercise of stock options | 12,199 | 9,359 |
Contributions from noncontrolling interests in subsidiaries | 4,396 | 178 |
Distributions paid to common shareholders | (73,984) | (52,887) |
Distributions paid to preferred shareholders | (3,004) | (3,004) |
Distributions paid to noncontrolling interests in Operating Partnership | (907) | (722) |
Net cash provided by financing activities | 163,644 | 35,268 |
Change in cash and cash equivalents | (59,446) | 266 |
Cash and cash equivalents at beginning of period | 62,869 | 2,901 |
Cash and cash equivalents at end of period | 3,423 | 3,167 |
Supplemental Cash Flow and Noncash Information | ||
Cash paid for interest, net of interest capitalized | 26,879 | 23,893 |
Supplemental disclosure of noncash activities: | ||
Restricted cash - acquisition of storage facilities | (22,019) | |
Accretion of liability, net | 4,174 | 7,427 |
Derivative valuation adjustment | 359 | 451 |
Foreign currency translation adjustment | (69) | |
Mortgage loan assumptions | $ 41,513 | $ 2,695 |
ORGANIZATION AND NATURE OF OPER
ORGANIZATION AND NATURE OF OPERATIONS | 6 Months Ended |
Jun. 30, 2016 | |
ORGANIZATION AND NATURE OF OPERATIONS | |
ORGANIZATION AND NATURE OF OPERATIONS | 1. ORGANIZATION AND NATURE OF OPERATIONS CubeSmart (the “Parent Company”) operates as a self-managed and self-administered real estate investment trust (“REIT”) with its operations conducted solely through CubeSmart, L.P. and its subsidiaries. CubeSmart, L.P., a Delaware limited partnership (the “Operating Partnership”), operates through an umbrella partnership structure, with the Parent Company, a Maryland REIT, as its sole general partner. In the notes to the consolidated financial statements, we use the terms “the Company”, “we” or “our” to refer to the Parent Company and the Operating Partnership together, unless the context indicates otherwise. As of June 30, 2016 , the Company owned self-storage facilities located in 22 states throughout the United States and the District of Columbia that are presented under one reportable segment: the Company owns, operates, develops, manages and acquires self-storage facilities. As of June 30, 2016 , the Parent Company owned approximately 98.8% of the partnership interests (“OP Units”) of the Operating Partnership. The remaining OP Units, consisting exclusively of limited partner interests, are held by persons who contributed their interests in facilities to the Operating Partnership in exchange for OP Units. Under the partnership agreement, these persons have the right to tender their OP Units for redemption to the Operating Partnership at any time for cash equal to the fair value of an equivalent number of common shares of the Parent Company. In lieu of delivering cash, however, the Parent Company, as the Operating Partnership’s general partner, may, at its option, choose to acquire any OP Units so tendered by issuing common shares in exchange for the tendered OP Units. If the Parent Company so chooses, its common shares will be exchanged for OP Units on a one -for-one basis. This one-for-one exchange ratio is subject to adjustment to prevent dilution. With each such exchange or redemption, the Parent Company’s percentage ownership in the Operating Partnership will increase. In addition, whenever the Parent Company issues common or other classes of its shares, it contributes the net proceeds it receives from the issuance to the Operating Partnership and the Operating Partnership issues to the Parent Company an equal number of OP Units or other partnership interests having preferences and rights that mirror the preferences and rights of the shares issued. This structure is commonly referred to as an umbrella partnership REIT or “UPREIT”. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2016 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared pursuant to the rules and regulations of the SEC regarding interim financial reporting and, in the opinion of each of the Parent Company’s and Operating Partnership’s respective management, include all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of financial position, results of operations and cash flows for each respective company for the interim periods presented in accordance with generally accepted accounting principles in the United States (“GAAP”). Accordingly, readers of this Quarterly Report on Form 10-Q should refer to the Parent Company’s and the Operating Partnership’s audited financial statements prepared in accordance with GAAP, and the related notes thereto, for the year ended December 31, 2015 , which are included in the Parent Company’s and the Operating Partnership’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015 . The results of operations for the three and six months ended June 30, 2016 and 2015 are not necessarily indicative of the results of operations to be expected for any future period or the full year. T he Company adopted Accounting Standard Update (“ASU“) No. 2015-02, Consolidation – Amendments to the Consolidation Analysis, as of January 1, 2016. The Company evaluated the application of this guidance and concluded that there were no changes to any previous conclusions with respect to consolidation accounting for any of its interests in less than wholly owned joint ventures. However, the Operating Partnership now meets the criteria as a variable interest entity. The Parent Company’s sole significant asset is its investment in the Operating Partnership. As a result, substantially all of the Parent Company’s assets and liabilities represent those assets and liabilities of the Operating Partnership. All of the Parent Company’s debt is an obligation of the Operating Partnership. Reclassifications During the first quarter of 2016, the Company adopted ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs, which requires the Company to reclassify debt financing costs, which were previously included in loan procurement costs, net of amortization on the Company’s consolidated balance sheets, and present them as a direct deduction from the carrying amount of the related debt liability. Net costs of $10.7 million have been reclassified in the December 31, 2015 consolidated balance sheets from the loan procurement costs line and netted against the related debt liability. See Recent Accounting Pronouncements below for revisions to the accounting guidance for debt issuance costs. Recent Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, which is intended to simplify various aspects related to how share-based payments are accounted for and presented in the financial statements. The new guidance allows for entities to make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures when they occur. In addition, the guidance allows employers to withhold shares to satisfy minimum statutory tax withholding requirements up to the employees’ maximum individual tax rate without causing the award to be classified as a liability. The guidance also stipulates that cash paid by an employer to a taxing authority when directly withholding shares for tax-withholding purposes should be classified as a financing activity on the statement of cash flows. The standard is effective on January 1, 2017, however early adoption is permitted. The Company is in the process of evaluating the impact of this new guidance. In February 2016, the FASB issued ASU No. 2016-02 - Leases (Topic 842), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either financing or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. The standard is effective on January 1, 2019, however early adoption is permitted. The Company is in the process of evaluating the impact of this new guidance. In September 2015, the FASB issued ASU No. 2015-16, Simplifying the Accounting for Measurement-Period Adjustments, which amends the current business combination guidance to require that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined, as opposed to having to revise prior period information. The standard also requires additional disclosure about the impact on current-period income statement line items of adjustments that would have been recognized in prior periods if prior period information had been revised. The new standard became effective for the Company on January 1, 2016. The adoption of this guidance did not have a material impact on the Company’s consolidated financial position or results of operations as there have been no measurement-period adjustments recorded. In April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs, an update to the accounting standard relating to the presentation of debt issuance costs. Under the new guidance, debt issuance costs related to a recognized debt liability will be presented on the balance sheet as a direct deduction from the debt liability. In the event that there is not an associated debt liability recorded in the consolidated financial statements, the debt issuance costs will continue to be recorded on the consolidated balance sheet as an asset until the debt liability is recorded. The new standard became effective for the Company on January 1, 2016. The adoption of this guidance did not have a material impact on the Company’s consolidated financial position or results of operations as the update only related to changes in financial statement presentation as discussed in notes 6 and 7. In February 2015, the FASB issued ASU No. 2015-02, Consolidation – Amendments to the Consolidation Analysis, which amends the current consolidation guidance affecting both the variable interest entity (“VIE”) and voting interest entity (“VOE”) consolidation models. The standard does not add or remove any of the characteristics in determining if an entity is a VIE or VOE, but rather enhances the way the Company assesses some of these characteristics. The new standard became effective for the Company on January 1, 2016. As discussed under Basis of Presentation above, the adoption of this guidance did not have a material impact on the Company’s consolidated financial position or results of operations as none of its existing consolidation conclusions were changed. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance under GAAP when it becomes effective. The new standard will be effective for the Company beginning on January 1, 2018, however early application beginning on January 1, 2017 is permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company has not yet selected a transition method nor has it determined the effect of the standard on its financial statements and related disclosures. |
STORAGE FACILITIES
STORAGE FACILITIES | 6 Months Ended |
Jun. 30, 2016 | |
STORAGE FACILITIES | |
STORAGE FACILITIES | 3. STORAGE FACILITIES The book value of the Company’s real estate assets is summarized as follows: June 30, December 31, 2016 2015 (in thousands) Land $ $ Buildings and improvements Equipment Construction in progress Storage facilities Less Accumulated depreciation Storage facilities, net $ $ The following table summarizes the Company’s acquisition and disposition activity from the period beginning on January 1, 2015 through June 30, 2016 : Number of Purchase / Sale Price Asset/Portfolio Market Transaction Date Facilities (in thousands) 2016 Acquisitions: Metro DC Asset Baltimore / DC January 2016 1 $ Texas Assets Texas Markets - Major January 2016 2 New York Asset New York / Northern NJ January 2016 1 Texas Asset Texas Markets - Major January 2016 1 Connecticut Asset Connecticut February 2016 1 Texas Asset Texas Markets - Major March 2016 1 Florida Assets Florida Markets - Other March 2016 3 Colorado Asset Denver / Aurora April 2016 1 Texas Asset Texas Markets - Major April 2016 1 Texas Asset Texas Markets - Major May 2016 1 Texas Asset Texas Markets - Major May 2016 1 Illinois Asset Chicago May 2016 1 Illinois Asset Chicago May 2016 1 Massachusetts Asset Massachusetts June 2016 1 17 $ 2015 Acquisitions: Texas Asset Texas Markets - Major February 2015 1 $ HSRE Assets Chicago March 2015 4 Arizona Asset Arizona / Las Vegas March 2015 1 Tennessee Asset Tennessee March 2015 1 Texas Asset Texas Markets - Major April 2015 1 Florida Asset Florida Markets - Other May 2015 1 Arizona Asset Arizona / Las Vegas June 2015 1 Florida Asset Florida Markets - Other June 2015 1 Texas Asset Texas Markets - Major July 2015 1 Maryland Asset Baltimore / DC July 2015 1 Maryland Asset Baltimore / DC July 2015 1 New York/New Jersey Assets New York / Northern NJ August 2015 2 New Jersey Asset New York / Northern NJ December 2015 1 PSI Assets Various (see note 4) December 2015 12 29 $ 2015 Dispositions: Texas Assets Texas Markets - Major October 2015 7 $ Florida Asset Florida Markets - Other October 2015 1 8 $ |
INVESTMENT ACTIVITY
INVESTMENT ACTIVITY | 6 Months Ended |
Jun. 30, 2016 | |
INVESTMENT ACTIVITY | |
INVESTMENT ACTIVITY | 4. INVESTMENT ACTIVITY 2016 Acquisitions During the six months ended June 30, 2016 , the Company acquired 17 self-storage facilities, including three facilities upon completion of construction and the issuance of a certificate of occupancy, located throughout the United States for an aggregate purchase price of approximately $270.9 million. In connection with these acquisitions, the Company allocated a portion of the purchase price to the intangible value of in-place leases, which aggregated $9.8 million at the time of the acquisition and prior to any amortization of such amounts. The estimated life of these in-place leases was 12 months, and the amortization expense that was recognized during the six months ended June 30, 2016 was approximately $3.0 million. In connection with one of the acquired facilities, the Company assumed mortgage debt that was recorded at a fair value of $6.5 million, which fair value includes an outstanding principal balance totaling $6.3 million and a net premium of $0.2 million to reflect the estimated fair value of the debt at the time of assumption. As final information regarding fair value of the assets acquired and liabilities assumed is received and estimates are refined, appropriate adjustments, if necessary, will be made to the purchase price allocation, in no case later than twelve months of the acquisition date. There have been no adjustments made to the purchase price allocation of assets acquired and liabilities assumed during 2015 and 2016. As of June 30, 2016 , the Company was under contract and had made aggregate deposits of $1.5 million associated with three facilities under construction for a total purchase price of $43.3 million. In connection with one of the facilities, the Company provided a $4.1 million loan, which was repaid to the Company in full in December 2015 , for the purpose of acquiring the premises on which the facility will be built. The deposits are reflected in Other assets, net on the Company’s consolidated balance sheets. The purchase of these three facilities is expected to occur by the first quarter of 2017 after the completion of construction and the issuance of a certificate of occupancy. These acquisitions are subject to due diligence and other customary closing conditions and no assurance can be provided that these acquisitions will be completed on the terms described, or at all. 2015 Acquisitions On December 15, 2015, the Company acquired all of the issued and outstanding uncertificated shares of common stock of a privately held self-storage REIT (“PSI”) for $115.8 million. As of the date of the acquisition, PSI owned real property consisting of 12 fully operational self-storage facilities which were acquired for $109.8 million, and one self-storage facility that remains under construction, which was acquired for $6.0 million (the “PSI Assets”). The PSI Assets are located in Arizona, Florida, Georgia, Massachusetts, New York, North Carolina, Tennessee, and Texas. In connection with this acquisition, the Company allocated a portion of the purchase price to the intangible value of in-place leases, which aggregated to $6.7 million at the time of the acquisition and prior to any amortization of such amounts. The estimated life of these in-place leases was 12 months, and the amortization expense that was recognized during the six months ended June 30, 2016 was approximately $3.4 million. During 2014, the Operating Partnership entered into an Agreement for Purchase and Sale with certain limited liability companies controlled by HSRE REIT I and HSRE REIT II, both Maryland real estate investment trusts, to acquire (the “HSRE Acquisition”) 26 self-storage facilities for an aggregate purchase price of $223.0 million plus customary closing costs. During 2014, the Company closed on the first tranche of 22 facilities comprising the HSRE Acquisition, for an aggregate purchase price of $195.5 million. On March 18, 2015, the Company closed on the second tranche of the remaining four self-storage facilities comprising the HSRE Acquisition, for an aggregate purchase price of $27.5 million. The four facilities purchased in the second tranche are located in Illinois. In connection with this acquisition, the Company allocated a portion of the purchase price to the intangible value of in-place leases, which aggregated to $2.7 million at the time of the acquisition and prior to any amortization of such amounts. The estimated life of these in-place leases was 12 months, and the amortization expense that was recognized during the six months ended June 30, 2016 was approximately $0.7 million . During the year ended December 31, 2015, the Company acquired 13 additional self-storage facilities, including one facility upon completion of construction and the issuance of a certificate of occupancy, located throughout the United States for an aggregate purchase price of approximately $155.0 million. In connection with these acquisitions, the Company allocated a portion of the purchase price to the tangible and intangible assets acquired based on fair value. Intangible assets consist of in-place leases, which aggregated $10.7 million at the time of the acquisitions and prior to any amortization of such amounts. The estimated life of these in-place leases was 12 months, and the amortization expense that was recognized during the six months ended June 30, 2016 was approximately $4.8 million. In connection with one of the acquired facilities, the Company assumed mortgage debt that was recorded at a fair value of $2.7 million, which fair value includes an outstanding principal balance totaling $2.5 million and a net premium of $0.2 million to reflect the estimated fair value of the debt at the time of assumption. 2015 Dispositions On October 8, 2015, the Company sold seven assets in Texas and one asset in Florida for an aggregate sales price of approximately $37.8 million. In connection with these sales, the Company recorded gains that totaled $14.4 million. The proceeds from these sales were held in escrow to fund future acquisitions under a tax free like kind exchange. As of June 30, 2016 , the total net proceeds of $36.4 million had been applied to three separate acquisitions, of which one closed in December 2015 and two closed in January 2016. On October 2, 2015, USIFB, LLP (“USIFB”), a consolidated real estate joint venture in which the Company owned a 97% interest, sold its remaining asset in London, England, for an aggregate sales price of £6.5 million (approximately $9.9 million). In connection with the sale, the Company recorded a gain of $3.0 million net of a foreign currency translation loss of $1.2 million. Development As of June 30, 2016 , the Company had three contracts through joint ventures for the construction of three self-storage facilities located in New York (see note 12). As part of the acquisition of the PSI Assets, the Company also acquired a self-storage facility that is under construction in North Palm Beach, FL. Additionally, during the quarter ended June 30, 2016, the Company issued 61,224 OP Units, valued at approximately $1.5 million, to pay the remaining consideration on its self-storage facility that is under construction in Washington, D.C. and was previously owned by a joint venture. Construction for all projects is expected to be completed by the second quarter of 2018. As of June 30, 2016 , development costs for these projects totaled $ 136.8 million. Total construction costs for these projects is expected to be $218.2 million. These costs are capitalized to construction in progress while the projects are under development and are reflected in Storage facilities on the Company’s consolidated balance sheets. During the second quarter of 2016, the Company, through a joint venture in which the Company owns a 51% interest, completed the construction, and opened for operation, a self-storage facility located in Bronx, NY. Total costs for this project were $32.2 million. These costs are capitalized to land, building, and improvements as well as equipment and are reflected in Storage facilities on the Company’s consolidated balance sheets. During the first quarter of 2016, the Company, through a joint venture in which the Company owned a 51% interest, completed the construction, and opened for operation, a self-storage facility located in Queens, NY. Total costs for this project were $31.8 million. These costs are capitalized to land, building, and improvements as well as equipment and are reflected in Storage facilities on the Company’s consolidated balance sheets. On April 5, 2016, the noncontrolling member put its 49% ownership interest in the venture to the Company for $12.5 million. During the fourth quarter of 2015, the Company, through two separate joint ventures in which the Company owns a 90% interest in each, completed the construction of two self-storage facilities located in the boroughs of New York, NY and the facilities opened for operation. Total costs for these projects were $32.2 million in aggregate. These costs are capitalized to land, building, and improvements as well as equipment and are reflected in Storage facilities on the Company’s consolidated balance sheets. During the second quarter of 2015, the Company, through a joint venture in which the Company owns a 90% interest, completed the construction, and opened for operation, a self-storage facility located in Arlington, VA. Total costs for this project were $17.1 million. These costs are capitalized to land, building, and improvements as well as equipment and are reflected in Storage facilities on the Company’s consolidated balance sheets. The following table summarizes the Company’s revenue and earnings associated with the 2016 and 2015 acquisitions from the respective acquisition dates in the period they were acquired, included in the consolidated statements of operations for the three and six months ended June 30, 2016 and 2015 : Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 (in thousands) Total revenue $ $ $ $ Net loss |
INVESTMENT IN UNCONSOLIDATED RE
INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURE | 6 Months Ended |
Jun. 30, 2016 | |
INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURE | |
INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURE | 5. INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURES During the fourth quarter of 2015, the Company invested a 10% ownership interest in a newly-formed joint venture (“HVP”) that agreed to acquire a property portfolio comprised of 37 self-storage facilities located in Michigan (17) , Tennessee (10) , Massachusetts (7) , and Florida (3) . HVP paid $242.5 million for these 37 facilities, of which $18.9 million was allocated to the value of the in-place lease intangible. HVP acquired 30 of the facilities on December 8, 2015 for $193.7 million, one of the facilities on January 26, 2016 for $5.7 million, five of the facilities on April 21, 2016 for $36.1 million, and one of the facilities on June 15, 2016 for $7.0 million. In connection with six of the acquired facilities, HVP assumed mortgage debt that was recorded at a fair value of $25.3 million, which includes an outstanding principal balance totaling $23.7 million and a net premium of $1.6 million to reflect the estimated fair value of the debt at the time of assumption. The remainder of the purchase price was funded through advances totaling $116.0 million on the venture’s $122.0 million loan facility and amounts contributed pro-rata by the Company and its unaffiliated joint venture partner. The Company’s total contribution to HVP related to this portfolio acquisition was $10.7 million. The loan facility bears interest at LIBOR plus 2.00% per annum and matures on December 7, 2018 with options to extend the maturity date through December 7, 2020, subject to satisfaction of certain conditions and payment of the extension fees as stipulated in the loan agreement. During the first quarter of 2016, HVP agreed to acquire a property portfolio comprised of 31 self-storage facilities located in South Carolina (22) , Georgia (5) , and North Carolina (4) that were previously managed by the Company for $115.5 million. HVP acquired 30 of the facilities on March 30, 2016 for $112.8 million, of which $10.3 million was allocated to the value of the in-place lease intangible. The remaining property is under contract to be acquired subsequent to June 30, 2016. In conjunction with the acquisition, HVP refinanced its existing loan facility by entering into an increased amended and restated loan facility not to exceed $185.5 million. The acquisition was funded primarily through an advance totaling $61.8 million on the venture’s amended and restated loan facility. 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 HVP related to this portfolio acquisition was $5.3 million, bringing its total investment in HVP to $16.0 million as of June 30, 2016. The amended and restated loan facility bears interest at LIBOR plus 2.00% per annum. The initial maturity date was extended to March 30, 2019 with options to extend through March 30, 2021, subject to satisfaction of certain conditions and payment of the extension fees as stipulated in the amended and restated loan agreement. On December 10, 2013, the Company invested a 50% ownership interest in a newly-formed joint venture (“HHF”) that acquired 35 self-storage facilities located in Texas (34) and North Carolina (1) . HHF paid $315.7 million for these facilities, of which $12.1 million was allocated to the value of the in-place lease intangible. The Company and the unaffiliated joint venture partner, collectively the “HHF Partners”, each contributed cash equal to 50% of the capital required to fund the acquisition. On May 1, 2014, HHF obtained a $100.0 million loan secured by the 34 self-storage facilities located in Texas that are owned by the venture. There is no recourse to the Company, subject to customary exceptions to non-recourse provisions. The loan bears interest at 3.59% per annum and matures on April 30, 2021. This financing completed the planned capital structure of HHF and proceeds (net of closing costs) of $99.2 million were distributed proportionately to the partners. Based upon the facts and circumstances at formation of HVP and HHF, the Company determined that neither entity is a VIE 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 HVP and HHF. Based upon each member's substantive participating rights over the activities of each entity as stipulated in the operating agreements, HVP and HHF are not consolidated by the Company and are accounted for under the equity method of accounting. The Company’s investments in HVP and HHF 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 HVP and HHF are presented in Equity in losses 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 real estate ventures. The following is a summary of the financial position of the HVP and HHF ventures as of June 30, 2016 and December 31, 2015 (in thousands): June 30, December 31, 2016 2015 Assets Storage facilities, net $ $ Other assets Total assets $ $ Liabilities and equity Other liabilities $ $ Debt Equity CubeSmart Joint venture partners Total liabilities and equity $ $ The following is a summary of results of operations of HVP and HHF for the three and six months ended June 30, 2016 and 2015 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Total revenues $ $ $ $ Operating expenses Interest expense, net Depreciation and amortization Net loss $ $ $ $ Company’s share of net loss $ $ $ $ |
UNSECURED SENIOR NOTES
UNSECURED SENIOR NOTES | 6 Months Ended |
Jun. 30, 2016 | |
UNSECURED SENIOR NOTES | |
UNSECURED SENIOR NOTES | 6. UNSECURED SENIOR NOTES On October 26, 2015, the Operating Partnership issued $250.0 million in aggregate principal amount of 4.00% unsecured senior notes due November 15, 2025 (the “2025 Senior Notes”). On December 17, 2013, the Operating Partnership issued $250.0 million in aggregate principal amount of 4.375% unsecured senior notes due December 15, 2023 (the “2023 Senior Notes”). On June 26, 2012, the Operating Partnership issued $250.0 million in aggregate principal amount of 4.80% unsecured senior notes due July 15, 2022 (the “2022 Senior Notes”) . The 2025 Senior Notes, the 2023 Senior Notes, and the 2022 Senior Notes are collectively referred to as the “Senior Notes.” During the first quarter of 2016, the Company adopted ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs, which requires the Company to reclassify debt financing costs, which were previously included in loan procurement costs, net of amortization on the Company’s consolidated balance sheets, and present them as a direct deduction from the carrying amount of the related debt liability. As of June 30, 2016 and December, 31, 2015, unsecured senior notes are presented net of unamortized loan procurement costs of $7.6 million and $8.1 million, respectively, on the consolidated balance sheets. The indenture under which the Senior Notes were issued restricts the ability of the Operating Partnership and its subsidiaries to incur debt unless the Operating Partnership and its consolidated subsidiaries comply with a leverage ratio not to exceed 60% and an interest coverage ratio of more than 1.5:1 after giving effect to the incurrence of the debt. The indenture also restricts the ability of the Operating Partnership and its subsidiaries to incur secured debt unless the Operating Partnership and its consolidated subsidiaries comply with a secured debt leverage ratio not to exceed 40% after giving effect to the incurrence of the debt. The indenture also contains other financial and customary covenants, including a covenant not to own unencumbered assets with a value less than 150% of the unsecured indebtedness of the Operating Partnership and its consolidated subsidiaries. As of June 30, 2016 , the Operating Partnership was in compliance with all of the financial covenants under the Senior Notes. |
REVOLVING CREDIT FACILITY AND U
REVOLVING CREDIT FACILITY AND UNSECURED TERM LOANS | 6 Months Ended |
Jun. 30, 2016 | |
REVOLVING CREDIT FACILITY AND UNSECURED TERM LOANS | |
REVOLVING CREDIT FACILITY AND UNSECURED TERM LOANS | 7. REVOLVING CREDIT FACILITY AND UNSECURED TERM LOANS On June 20, 2011, the Company entered into an unsecured term loan agreement (the “Term Loan Facility”) which consisted of a $100.0 million term loan with a five -year maturity (“Term Loan A”) and a $100.0 million term loan with a seven -year maturity (“Term Loan B”). On December 9, 2011, the Company entered into a credit facility (the “Credit Facility”) comprised of a $100.0 million unsecured term loan maturing in December 2014 (“Term Loan C”); a $200.0 million unsecured term loan maturing in March 2017 (“Term Loan D”); and a $300.0 million unsecured revolving facility maturing in December 2015 (“Revolver”). On June 18, 2013 , the Company amended both the Term Loan Facility and Credit Facility. With respect to the Term Loan Facility, among other things, the amendment extended the maturity date to June 2018 and decreased the pricing of Term Loan A, while Term Loan B remained unchanged by the amendment. With respect to the Credit Facility, among other things, the amendment extended the maturity date to January 2019 and decreased the pricing of Term Loan D. On August 5, 2014, the Company further amended the Term Loan Facility to extend the maturity date to January 2020 and decrease the pricing of Term Loan B. On December 17, 2013, the Company repaid the $100.0 million balance under Term Loan C that was scheduled to mature in December 2014. Pricing on the Term Loan Facility depends on the Company’s unsecured debt credit ratings. At the Company’s current Baa2/BBB level, amounts drawn under Term Loan A are priced at 1.30% over LIBOR , while amounts drawn under Term Loan B are priced at 1.15% over LIBOR . On April 22, 2015, the Company further amended its Credit Facility with respect to the Revolver. Among other things, the amendment increased the aggregate amount of the Revolver from $300.0 million to $500.0 million, decreased the facility fee from 0.20% to 0.15% and extended the maturity date to April 22, 2020. Pricing on the Credit Facility depends on the Company’s unsecured debt credit ratings. At the Company’s current Baa2/BBB level, amounts drawn under the Revolver are priced at 1.25% over LIBOR , inclusive of a facility fee of 0.15% , while amounts drawn under Term Loan D are priced at 1.30% over LIBOR . T he Company incurred costs of $2.3 million in 2015 in connection with amending the Credit Facility and capitalized such costs as a component of loan procurement costs, net of amortization on the consolidated balance sheet. Additionally, in connection with the amendment, $0.1 million of unamortized costs were written-off. All remaining unamortized costs, along with costs incurred in connection with the amendment, are amortized as an adjustment to interest expense over the remaining term of the modified facilities. During the first quarter of 2016, the Company adopted ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs, which requires the Company to reclassify debt financing costs, which were previously included in loan procurement costs, net of amortization on the Company’s consolidated balance sheets, and present them as a direct deduction from the carrying amount of the related debt liability. As of June 30, 2016 and December, 31, 2015, unsecured term loans are presented net of unamortized loan procurement costs of $1.5 million and $1.8 million, respectively, on the consolidated balance sheets. Deferred financing costs associated with the Revolver remain in loan procurement costs, net of amortization on the Company’s consolidated balance sheets. As of June 30, 2016 , $200.0 million of unsecured term loan borrowings were outstanding under the Term Loan Facility, $200.0 million of unsecured term loan borrowings were outstanding under the Credit Facility, $150.0 million of unsecured revolving credit facility borrowings were outstanding under the Credit Facility, and $350.0 million was available for borrowing under the unsecured revolving portion of the Credit Facility. In connection with a portion of the unsecured borrowings, the Company had interest rate swaps as of June 30, 2016 that fix 30 -day LIBOR (see note 10). As of June 30, 2016 , borrowings under the Credit Facility and Term Loan Facility, as amended and after giving effect to the interest rate swaps, had an effective weighted average interest rate of 2.41% . The Term Loan Facility and the term loan under the Credit Facility were fully drawn at June 30, 2016 and no further borrowings may be made under the term loans. The Company’s ability to borrow under the revolving portion of the Credit Facility is subject to ongoing compliance with certain financial covenants which include: · Maximum total indebtedness to total asset value of 60.0% at any time; · Minimum fixed charge coverage ratio of 1.50:1 .00; and · Minimum tangible net worth of $821,211,200 plus 75% of net proceeds from equity issuances after June 30, 2010 . Further, under the Credit Facility and Term Loan Facility, the Company is restricted from paying distributions on the Parent Company’s common shares in excess of the greater of (i) 95% of funds from operations, and (ii) such amount as may be necessary to maintain the Parent Company’s REIT status. As of June 30, 2016 , the Company was in compliance with all of its financial covenants and anticipates being in compliance with all of its financial covenants through the terms of the Credit Facility and Term Loan Facility. |
MORTGAGE LOANS AND NOTES PAYABL
MORTGAGE LOANS AND NOTES PAYABLE | 6 Months Ended |
Jun. 30, 2016 | |
MORTGAGE LOANS AND NOTES PAYABLE | |
MORTGAGE LOANS AND NOTES PAYABLE | 8. MORTGAGE LOANS AND NOTES PAYABLE The Company’s mortgage loans and notes payable are summarized as follows: Carrying Value as of: June 30, December 31, Effective Maturity Mortgage Loans and Notes Payable 2016 2015 Interest Rate Date (in thousands) YSI 59 $ — $ % Mar-16 YSI 60 — % Aug-16 YSI 51 % Sep-16 YSI 64 % Oct-16 YSI 62 % Dec-16 YSI 67 — % Mar-17 YSI 33 % Jul-19 YSI 26 % Nov-20 YSI 57 % Nov-20 YSI 55 % Jun-21 YSI 24 % Jun-21 YSI 65 % Jun-23 YSI 66 — % Jun-23 Principal balance outstanding Plus: Unamortized fair value adjustment Less: Loan procurement costs, net Total mortgage loans and notes payable, net $ $ As of June 30, 2016 and December 31, 2015 , the Company’s mortgage loans payable were secured by certain of its self-storage facilities with net book values of approximately $244.8 million and $195.4 million, respectively. The following table represents the future principal payment requirements on the outstanding mortgage loans and notes payable as of June 30, 2016 (in thousands): 2016 $ 2017 2018 2019 2020 2021 and thereafter Total mortgage payments Plus: Unamortized fair value adjustment Less: Loan procurement costs, net Total mortgage indebtedness $ |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE LOSS | 6 Months Ended |
Jun. 30, 2016 | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | 9. ACCUMULATED OTHER COMPREHENSIVE LOSS The following table summarizes the changes in accumulated other comprehensive loss by component for the six months ended June 30, 2016 (in thousands): Unrealized losses on interest rate swaps Balance at December 31, 2015 $ Other comprehensive loss before reclassifications Amounts reclassified from accumulated other comprehensive loss Net current-period other comprehensive income Balance at June 30, 2016 $ (a) See note 10 for additional information about the effects of the amounts reclassified . |
RISK MANAGEMENT AND USE OF FINA
RISK MANAGEMENT AND USE OF FINANCIAL INSTRUMENTS | 6 Months Ended |
Jun. 30, 2016 | |
RISK MANAGEMENT AND USE OF FINANCIAL INSTRUMENTS | |
RISK MANAGEMENT AND USE OF FINANCIAL INSTRUMENTS | 10. RISK MANAGEMENT AND USE OF FINANCIAL INSTRUMENTS The Company’s use of derivative instruments is limited to the utilization of interest rate swap agreements or other instruments to manage interest rate risk exposures and not for speculative purposes. The principal objective of such arrangements is to minimize the risks and/or costs associated with the Company’s operating and financial structure, as well as to hedge specific transactions. The counterparties to these arrangements are major financial institutions with which the Company and its subsidiaries may also have other financial relationships. The Company is potentially exposed to credit loss in the event of non-performance by these counterparties. However, because of the high credit ratings of the counterparties, the Company does not anticipate that any of the counterparties will fail to meet these obligations as they come due. The Company does not hedge credit or property value market risks. The Company has entered into interest rate swap agreements that qualify and are designated as cash flow hedges designed to reduce the impact of interest rate changes on its variable rate debt. Therefore, the interest rate swaps are recorded in the consolidated balance sheet at fair value and the related gains or losses are deferred in shareholders’ equity as accumulated other comprehensive loss. These deferred gains and losses are amortized into interest expense during the period or periods in which the related interest payments affect earnings. However, to the extent that the interest rate swaps are not perfectly effective in offsetting the change in value of the interest payments being hedged, the ineffective portion of these contracts is recognized in earnings immediately. The Company formally assesses, both at inception of a hedge and on an on-going basis, whether each derivative is highly-effective in offsetting changes in cash flows of the hedged item. If management determines that a derivative is highly-effective as a hedge, then the Company accounts for the derivative using hedge accounting, pursuant to which gains or losses inherent in the derivative do not impact the Company’s results of operations. If management determines that a derivative is not highly-effective as a hedge or if a derivative ceases to be a highly-effective hedge, the Company will discontinue hedge accounting prospectively and will reflect in its statement of operations realized and unrealized gains and losses in respect of the derivative. The following table summarizes the terms and fair values of the Company’s derivative financial instruments as of June 30, 2016 and December 31, 2015 , respectively (dollars in thousands): Hedge Hedge Notional Amount Fair Value Product Type (a) June 30, 2016 December 31, 2015 Strike Effective Date Maturity June 30, 2016 December 31, 2015 Swap Cash flow $ — $ % 6/20/2011 6/20/2016 $ — $ Swap Cash flow — % 6/20/2011 6/20/2016 — Swap Cash flow — % 6/20/2011 6/20/2016 — Swap Cash flow % 12/30/2011 3/31/2017 Swap Cash flow % 12/30/2011 3/31/2017 Swap Cash flow % 12/30/2011 3/31/2017 Swap Cash flow % 12/30/2011 3/31/2017 Swap Cash flow % 6/20/2011 6/20/2018 Swap Cash flow % 6/20/2011 6/20/2018 Swap Cash flow % 6/20/2011 6/20/2018 $ $ $ $ (a) Hedging unsecured variable rate debt by fixing 30 -day LIBOR. The Company measures its derivative instruments at fair value and records them in the balance sheet as either an asset or liability. As of June 30, 2016 and December 31, 2015 , all derivative instruments were included in accounts payable, accrued expenses and other liabilities in the accompanying consolidated balance sheets. The effective portions of changes in the fair value of the derivatives are reported in accumulated other comprehensive income (loss). Amounts reported in accumulated other comprehensive income (loss) related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. The change in unrealized loss on interest rate swap reflects a reclassification of $2.6 million of unrealized losses from accumulated other comprehensive loss as an increase to interest expense during the six months ended June 30, 2016 . The Company estimates that $3.3 million will be reclassified as an increase to interest expense within the next 12 months. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 6 Months Ended |
Jun. 30, 2016 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | 11. FAIR VALUE MEASUREMENTS The Company applies the methods of determining fair value as described in authoritative guidance, to value its financial assets and liabilities. As defined in the guidance, fair value is based on the price that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In order to increase consistency and comparability in fair value measurements, the guidance establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data. Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs, to the extent possible, as well as considering counterparty credit risk in its assessment of fair value. Financial assets and liabilities carried at fair value as of June 30, 2016 are classified in the table below in one of the three categories described above (in thousands): Level 1 Level 2 Level 3 Interest Rate Swap Derivative Liabilities $ — $ $ — Total liabilities at fair value $ — $ $ — Financial assets and liabilities carried at fair value as of December 31, 2015 are classified in the table below in one of the three categories described above (in thousands): Level 1 Level 2 Level 3 Interest Rate Swap Derivative Liabilities $ — $ $ — Total liabilities at fair value $ — $ $ — Financial assets and liabilities carried at fair value were classified as Level 2 inputs. For financial liabilities that utilize Level 2 inputs, the Company utilizes both direct and indirect observable price quotes, including LIBOR yield curves, bank price quotes for forward starting swaps, NYMEX futures pricing and common stock price quotes. Below is a summary of valuation techniques for Level 2 financial liabilities: · Interest rate swap derivative assets and liabilities – valued using LIBOR yield curves at the reporting date. Counterparties to these contracts are most often highly rated financial institutions, none of which experienced any significant downgrades in 2016 that would reduce the amount owed by the Company. Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with the Company’s derivatives utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by the Company and the counterparties. However, as of June 30, 2016 , the Company has assessed the significance of the effect of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy. The fair values of financial instruments, including cash and cash equivalents, restricted cash, accounts receivable and accounts payable approximate their respective carrying values at June 30, 2016 and December 31, 2015 . The aggregate carrying value of the Company’s debt was $1.4 billion and $1.3 billion at June 30, 2016 and December 31, 2015, respectively . The estimated fair value of the Company’s debt was $ 1.5 billion and $1.3 billion at June 30, 2016 and December 31, 2015, respect ively . These estimates were based on a discounted cash flow analysis assuming market interest rates for comparable obligations at June 30, 2016 and December 31, 2015 . The Company estimates the fair value of its fixed rate debt and the credit spreads over variable market rates on its variable rate debt by discounting the future cash flows of each instrument at estimated market rates or credit spreads consistent with the maturity of the debt obligation with similar credit policies, which is classified within level 2 of the fair value hierarchy. Rates and credit spreads take into consideration general market conditions and maturity. |
NONCONTROLLING INTERESTS
NONCONTROLLING INTERESTS | 6 Months Ended |
Jun. 30, 2016 | |
NONCONTROLLING INTERESTS | |
NONCONTROLLING INTERESTS | 12. NONCONTROLLING INTERESTS Interests in Consolidated Real Estate Joint Ventures Noncontrolling interests in subsidiaries represent the ownership interests of third parties in the Company’s consolidated real estate ventures. The Company has determined that these ventures are variable interest entities, and that the Company is the primary beneficiary. Accordingly, the Company consolidates the assets, liabilities, and results of operations of the real estate ventures in the table below (dollars in thousands): Date Opened / CubeSmart Number of Estimated Ownership June 30, 2016 Development Ventures Facilities Location Opening Interest Total Assets Total Liabilities 444 55 th Street Holdings, LLC ("55 th St") (1) 1 New York, NY Q1 2018 (est.) 90% $ $ 2880 Exterior St, LLC ("Exterior St") (2) 1 Bronx, NY Q2 2018 (est.) 51% 3068 Cropsey Avenue, LLC ("Cropsey Ave") (2) 1 Brooklyn, NY Q4 2017 (est.) 51% 2301 Tillotson Ave, LLC ("Tillotson") (2) 1 Bronx, NY Q2 2016 51% CS SNL New York Ave, LLC ("SNL I") (3) 1 Brooklyn, NY Q4 2015 90% 186 Jamaica Avenue, LLC ("SNL II") (3) 1 Brooklyn, NY Q4 2015 90% Shirlington Rd, LLC ("SRLLC") (3) 1 Arlington, VA Q2 2015 90% 7 $ $ (1) In connection with the acquired property, 55 th St assumed mortgage debt that was recorded at a fair value of $35.0 million, which fair value includes an outstanding principal balance totaling $32.5 million and a net premium of $2.5 million to reflect the estimated fair value of the debt at the time of assumption. The loan accrues interest at a fixed rate of 4.68% , matures on June 7, 2023, and is fully guaranteed by the Company. (2) The noncontrolling members of Tillotson, Cropsey Ave, and Exterior St have the option to put their ownership interest in the ventures to the Company for $17.0 million, $20.4 million, and $37.8 million, respectively, within the one -year period after construction of each facility is substantially complete. Additionally, the Company has a one -year option to call the ownership interest of the noncontrolling members of Tillotson, Cropsey Ave, and Exterior St for $17.0 million, $20.4 million, and $37.8 million, respectively, beginning on the second anniversary of the facilities’ construction being substantially complete. The Company is accreting the respective liabilities during the development periods and, as of June 30, 2016, has accrued $17.0 million, $6.8 million, and $6.3 million related to Tillotson, Cropsey Ave, and Exterior St, respectively. (3) The Company has a related party loan commitment to these ventures to fund all or a portion of the construction costs. As of June 30, 2016 , the Company has provided $9.1 million of a total $9.8 million loan commitment to SNL I, $11.3 million of a total $12.8 million loan commitment to SNL II, and $13.1 million of a total $14.6 million loan commitment to SRLLC. These loans and related interest were eliminated during consolidation. USIFB, LLP (“USIFB”) was formed to own, operate, acquire and develop self-storage facilities in England. The Company owned a 97% interest in the USIFB through a wholly-owned subsidiary and USIFB commenced operations at two facilities in London, England during 2008. The Company determined that USIFB is a variable interest entity, and that the Company is the primary beneficiary. Accordingly, the Company consolidated the assets, liabilities and results of operations of USIFB. On December 31, 2013, the Company provided a $6.8 million (£4.1 million) loan secured by a mortgage on real estate assets of USIFB. On June 30, 2014, one of the assets was sold for net proceeds of $7.0 million and the loan was repaid with proceeds from the sale. The loan and any related interest were eliminated during consolidation. On October 2, 2015, USIFB sold its remaining asset in London, England, for an aggregate sales price of £6.5 million (approximately $9.9 million as of the date of the sale). In connection with the sale during the fourth quarter of 2015, the Company recorded a gain of $3.0 million net of a foreign currency translation loss of $1.2 million. Operating Partnership Ownership The Company follows guidance regarding the classification and measurement of redeemable securities. Under this guidance, securities that are redeemable for cash or other assets, at the option of the holder and not solely within the control of the issuer, must be classified outside of permanent equity/capital. This classification results in certain outside ownership interests being included as redeemable noncontrolling interests outside of permanent equity/capital in the consolidated balance sheets. The Company makes this determination based on terms in applicable agreements, specifically in relation to redemption provisions. Additionally, with respect to redeemable ownership interests in the Operating Partnership held by third parties for which CubeSmart has a choice to settle the redemption by delivery of its own shares, the Operating Partnership considered the guidance regarding accounting for derivative financial instruments indexed to, and potentially settled in, a company’s own shares, to evaluate whether CubeSmart controls the actions or events necessary to presume share settlement. The guidance also requires that noncontrolling interests classified outside of permanent capital be adjusted each period to the greater of the carrying value based on the accumulation of historical cost or the redemption value. Approximately 1.2 % of the outstanding OP Units as of June 30, 2016 and December 31, 2015 , were not owned by CubeSmart, the sole general partner. The interests in the Operating Partnership represented by these OP Units were a component of the consideration that the Operating Partnership paid to acquire certain self-storage facilities. The holders of the OP Units are limited partners in the Operating Partnership and have the right to require CubeSmart to redeem all or part of their OP Units for, at the general partner’s option, an equivalent number of common shares of CubeSmart or cash based upon the fair value of an equivalent number of common shares of CubeSmart. However, the partnership agreement contains certain provisions that could result in a settlement outside the control of CubeSmart and the Operating Partnership, as CubeSmart does not have the ability to settle in unregistered shares. Accordingly, consistent with the guidance, the Operating Partnership will record the OP Units owned by third parties outside of permanent capital in the consolidated balance sheets. Net income or loss related to the OP Units owned by third parties is excluded from net income or loss attributable to Operating Partner in the consolidated statements of operations. On May 14, 2015, the Company closed on the acquisition of real property that will be developed into a self-storage facility in Washington, D.C. In conjunction with the closing, the Company issued 20,408 OP Units, valued at approximately $0.5 million to pay a portion of the consideration. On April 18, 2016, upon the completion of certain milestones, the Company issued 61,224 additional OP Units, valued at approximately $1.5 million, to pay the remaining consideration. The facility is expected to commence operations during 2016. As of June 30, 2016 and December 31, 2015 , 2,220,874 and 2,159,650 OP units, respectively, were held by third parties. The per unit cash redemption amount of the outstanding OP units was calculated based upon the average of the closing prices of the common shares of CubeSmart on the New York Stock Exchange for the final 10 trading days of the quarter. Based on the Company’s evaluation of the redemption value of the redeemable noncontrolling interest, the Company has reflected these interests at their redemption value at June 30, 2016 and December 31, 2015 , as the estimated redemption value exceeded their carrying value. The Operating Partnership recorded an increase to OP Units owned by third parties and a corre sponding decrease to capital of $1.5 million and $19.6 million at June 30, 2016 and December 31, 2015 , respectively. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2016 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | 13. RELATED PARTY TRANSACTIONS Affiliated Real Estate Investments The Company provides management services to certain joint ventures and other related party facilities. Management agreements provide generally for management fees of between 5 - 6% of cash collections at the managed facilities. Total management fees for unconsolidated joint ventures or other entities in which the Company held an ownership interest for the three and six months ended June 30, 2016 totaled $0.7 million and $1.2 million, respectively. Total management fees for unconsolidated joint ventures or other entities in which the Company held an ownership interest for the three and six months ended June 30, 2015 totaled $0.2 million and $0.5 million, respectively. The management agreements for certain joint ventures, other related parties and third-party facilities provide for the reimbursement to the Company for certain expenses incurred to manage the facilities. These amounts consist of amounts due for management fees, payroll, and other expenses incurred on behalf of the facilities. The amounts due to the Company were $3.0 million and $1.9 million as of June 30, 2016 and December 31, 2015, respectively, and are reflected in Other assets, net on the Company’s consolidated balance sheets. Additionally, as discussed in note 12, the Company has outstanding mortgage loans receivable from consolidated joint ventures of $33.3 million and $29.6 million as of June 30, 2016 and December 31, 2015 , respectively, which are eliminated for consolidation purposes. The Company believes that all of these related-party receivables are fully collectible . The HVP operating agreement provides for an acquisition fee payable from HVP to the Company in an amount equal to 0.5% of the purchase price upon the closing of an acquisition by HVP or any of its subsidiaries. During the three and six months ended June 30, 2016 the Company recognized $1.2 million and $1.8 million, respectively, in acquisition fees in conjunction with HVP’s acquisition of 67 self storage facilities, which are included in Other income on the consolidated statements of operations. |
PRO FORMA FINANCIAL INFORMATION
PRO FORMA FINANCIAL INFORMATION | 6 Months Ended |
Jun. 30, 2016 | |
PRO FORMA FINANCIAL INFORMATION | |
PRO FORMA FINANCIAL INFORMATION | 14. PRO FORMA FINANCIAL INFORMATION During the six months ended June 30, 2016 and the year ended December 31, 2015 , the Company acquired 17 self-storage facilities for an aggregate purchase price of approximately $270.9 million (see note 4) and 29 self-storage facilities for an aggregate purchase price of approximately $292.4 million, respectively. The condensed consolidated pro forma financial information set forth below reflects adjustments to the Company’s historical financial data to give effect to each of the acquisitions and related financing activity (including the issuance of common shares) that occurred during 2016 and 2015 as if each had occurred as of January 1, 2015 and 2014, respectively. The unaudited pro forma information presented below does not purport to represent what the Company’s actual results of operations would have been for the periods indicated, nor does it purport to represent the Company’s future results of operations. The following table summarizes, on a pro forma basis, the Company’s consolidated results of operations for the six months ended June 30, 2016 and 2015 based on the assumptions described above: Six Months Ended June 30, 2016 2015 (in thousands, except per share data) Pro forma revenue $ $ Pro forma net income $ $ Earnings per common share: Basic - as reported $ $ Diluted - as reported $ $ Basic - as pro forma $ $ Diluted - as pro forma $ $ |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2016 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | 15. SUBSEQUENT EVENTS Subsequent to June 30, 2016, the Company acquired two self-storage facilities in Nevada for an aggregate purchase price of approximately $23.2 million. |
SUMMARY OF SIGNIFICANT ACCOUN23
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) - 10Q | 6 Months Ended |
Jun. 30, 2016 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared pursuant to the rules and regulations of the SEC regarding interim financial reporting and, in the opinion of each of the Parent Company’s and Operating Partnership’s respective management, include all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of financial position, results of operations and cash flows for each respective company for the interim periods presented in accordance with generally accepted accounting principles in the United States (“GAAP”). Accordingly, readers of this Quarterly Report on Form 10-Q should refer to the Parent Company’s and the Operating Partnership’s audited financial statements prepared in accordance with GAAP, and the related notes thereto, for the year ended December 31, 2015 , which are included in the Parent Company’s and the Operating Partnership’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015 . The results of operations for the three and six months ended June 30, 2016 and 2015 are not necessarily indicative of the results of operations to be expected for any future period or the full year. T he Company adopted Accounting Standard Update (“ASU“) No. 2015-02, Consolidation – Amendments to the Consolidation Analysis, as of January 1, 2016. The Company evaluated the application of this guidance and concluded that there were no changes to any previous conclusions with respect to consolidation accounting for any of its interests in less than wholly owned joint ventures. However, the Operating Partnership now meets the criteria as a variable interest entity. The Parent Company’s sole significant asset is its investment in the Operating Partnership. As a result, substantially all of the Parent Company’s assets and liabilities represent those assets and liabilities of the Operating Partnership. All of the Parent Company’s debt is an obligation of the Operating Partnership. |
Reclassifications | Reclassifications During the first quarter of 2016, the Company adopted ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs, which requires the Company to reclassify debt financing costs, which were previously included in loan procurement costs, net of amortization on the Company’s consolidated balance sheets, and present them as a direct deduction from the carrying amount of the related debt liability. Net costs of $10.7 million have been reclassified in the December 31, 2015 consolidated balance sheets from the loan procurement costs line and netted against the related debt liability. See Recent Accounting Pronouncements below for revisions to the accounting guidance for debt issuance costs. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, which is intended to simplify various aspects related to how share-based payments are accounted for and presented in the financial statements. The new guidance allows for entities to make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures when they occur. In addition, the guidance allows employers to withhold shares to satisfy minimum statutory tax withholding requirements up to the employees’ maximum individual tax rate without causing the award to be classified as a liability. The guidance also stipulates that cash paid by an employer to a taxing authority when directly withholding shares for tax-withholding purposes should be classified as a financing activity on the statement of cash flows. The standard is effective on January 1, 2017, however early adoption is permitted. The Company is in the process of evaluating the impact of this new guidance. In February 2016, the FASB issued ASU No. 2016-02 - Leases (Topic 842), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either financing or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. The standard is effective on January 1, 2019, however early adoption is permitted. The Company is in the process of evaluating the impact of this new guidance. In September 2015, the FASB issued ASU No. 2015-16, Simplifying the Accounting for Measurement-Period Adjustments, which amends the current business combination guidance to require that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined, as opposed to having to revise prior period information. The standard also requires additional disclosure about the impact on current-period income statement line items of adjustments that would have been recognized in prior periods if prior period information had been revised. The new standard became effective for the Company on January 1, 2016. The adoption of this guidance did not have a material impact on the Company’s consolidated financial position or results of operations as there have been no measurement-period adjustments recorded. In April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs, an update to the accounting standard relating to the presentation of debt issuance costs. Under the new guidance, debt issuance costs related to a recognized debt liability will be presented on the balance sheet as a direct deduction from the debt liability. In the event that there is not an associated debt liability recorded in the consolidated financial statements, the debt issuance costs will continue to be recorded on the consolidated balance sheet as an asset until the debt liability is recorded. The new standard became effective for the Company on January 1, 2016. The adoption of this guidance did not have a material impact on the Company’s consolidated financial position or results of operations as the update only related to changes in financial statement presentation as discussed in notes 6 and 7. In February 2015, the FASB issued ASU No. 2015-02, Consolidation – Amendments to the Consolidation Analysis, which amends the current consolidation guidance affecting both the variable interest entity (“VIE”) and voting interest entity (“VOE”) consolidation models. The standard does not add or remove any of the characteristics in determining if an entity is a VIE or VOE, but rather enhances the way the Company assesses some of these characteristics. The new standard became effective for the Company on January 1, 2016. As discussed under Basis of Presentation above, the adoption of this guidance did not have a material impact on the Company’s consolidated financial position or results of operations as none of its existing consolidation conclusions were changed. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance under GAAP when it becomes effective. The new standard will be effective for the Company beginning on January 1, 2018, however early application beginning on January 1, 2017 is permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company has not yet selected a transition method nor has it determined the effect of the standard on its financial statements and related disclosures. |
STORAGE FACILITIES (Tables)
STORAGE FACILITIES (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
STORAGE FACILITIES | |
Summary of real estate assets | June 30, December 31, 2016 2015 (in thousands) Land $ $ Buildings and improvements Equipment Construction in progress Storage facilities Less Accumulated depreciation Storage facilities, net $ $ |
Schedule of acquisitions and dispositions of real estate assets | Number of Purchase / Sale Price Asset/Portfolio Market Transaction Date Facilities (in thousands) 2016 Acquisitions: Metro DC Asset Baltimore / DC January 2016 1 $ Texas Assets Texas Markets - Major January 2016 2 New York Asset New York / Northern NJ January 2016 1 Texas Asset Texas Markets - Major January 2016 1 Connecticut Asset Connecticut February 2016 1 Texas Asset Texas Markets - Major March 2016 1 Florida Assets Florida Markets - Other March 2016 3 Colorado Asset Denver / Aurora April 2016 1 Texas Asset Texas Markets - Major April 2016 1 Texas Asset Texas Markets - Major May 2016 1 Texas Asset Texas Markets - Major May 2016 1 Illinois Asset Chicago May 2016 1 Illinois Asset Chicago May 2016 1 Massachusetts Asset Massachusetts June 2016 1 17 $ 2015 Acquisitions: Texas Asset Texas Markets - Major February 2015 1 $ HSRE Assets Chicago March 2015 4 Arizona Asset Arizona / Las Vegas March 2015 1 Tennessee Asset Tennessee March 2015 1 Texas Asset Texas Markets - Major April 2015 1 Florida Asset Florida Markets - Other May 2015 1 Arizona Asset Arizona / Las Vegas June 2015 1 Florida Asset Florida Markets - Other June 2015 1 Texas Asset Texas Markets - Major July 2015 1 Maryland Asset Baltimore / DC July 2015 1 Maryland Asset Baltimore / DC July 2015 1 New York/New Jersey Assets New York / Northern NJ August 2015 2 New Jersey Asset New York / Northern NJ December 2015 1 PSI Assets Various (see note 4) December 2015 12 29 $ 2015 Dispositions: Texas Assets Texas Markets - Major October 2015 7 $ Florida Asset Florida Markets - Other October 2015 1 8 $ |
INVESTMENT ACTIVITY (Tables)
INVESTMENT ACTIVITY (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
INVESTMENT ACTIVITY | |
Schedule of revenue and earnings from acquisitions since the acquisition dates included in consolidated statement of operations | Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 (in thousands) Total revenue $ $ $ $ Net loss |
INVESTMENT IN UNCONSOLIDATED 26
INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURE (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURE | |
Summary of the financial position of the HVP and HHF venture | The following is a summary of the financial position of the HVP and HHF ventures as of June 30, 2016 and December 31, 2015 (in thousands): June 30, December 31, 2016 2015 Assets Storage facilities, net $ $ Other assets Total assets $ $ Liabilities and equity Other liabilities $ $ Debt Equity CubeSmart Joint venture partners Total liabilities and equity $ $ |
Summary of results of operations of the HVP and HHF Venture | Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Total revenues $ $ $ $ Operating expenses Interest expense, net Depreciation and amortization Net loss $ $ $ $ Company’s share of net loss $ $ $ $ |
MORTGAGE LOANS AND NOTES PAYA27
MORTGAGE LOANS AND NOTES PAYABLE (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
MORTGAGE LOANS AND NOTES PAYABLE | |
Summary of mortgage loans and notes payable | Carrying Value as of: June 30, December 31, Effective Maturity Mortgage Loans and Notes Payable 2016 2015 Interest Rate Date (in thousands) YSI 59 $ — $ % Mar-16 YSI 60 — % Aug-16 YSI 51 % Sep-16 YSI 64 % Oct-16 YSI 62 % Dec-16 YSI 67 — % Mar-17 YSI 33 % Jul-19 YSI 26 % Nov-20 YSI 57 % Nov-20 YSI 55 % Jun-21 YSI 24 % Jun-21 YSI 65 % Jun-23 YSI 66 — % Jun-23 Principal balance outstanding Plus: Unamortized fair value adjustment Less: Loan procurement costs, net Total mortgage loans and notes payable, net $ $ |
Schedule of the future principal payment requirements on the outstanding mortgage loans and notes payable | 2016 $ 2017 2018 2019 2020 2021 and thereafter Total mortgage payments Plus: Unamortized fair value adjustment Less: Loan procurement costs, net Total mortgage indebtedness $ |
ACCUMULATED OTHER COMPREHENSI28
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | |
Summary of changes in accumulated other comprehensive loss by component | Unrealized losses on interest rate swaps Balance at December 31, 2015 $ Other comprehensive loss before reclassifications Amounts reclassified from accumulated other comprehensive loss Net current-period other comprehensive income Balance at June 30, 2016 $ |
RISK MANAGEMENT AND USE OF FI29
RISK MANAGEMENT AND USE OF FINANCIAL INSTRUMENTS (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
RISK MANAGEMENT AND USE OF FINANCIAL INSTRUMENTS | |
Summary of terms and fair values of the derivative financial instruments | The following table summarizes the terms and fair values of the Company’s derivative financial instruments as of June 30, 2016 and December 31, 2015 , respectively (dollars in thousands): Hedge Hedge Notional Amount Fair Value Product Type (a) June 30, 2016 December 31, 2015 Strike Effective Date Maturity June 30, 2016 December 31, 2015 Swap Cash flow $ — $ % 6/20/2011 6/20/2016 $ — $ Swap Cash flow — % 6/20/2011 6/20/2016 — Swap Cash flow — % 6/20/2011 6/20/2016 — Swap Cash flow % 12/30/2011 3/31/2017 Swap Cash flow % 12/30/2011 3/31/2017 Swap Cash flow % 12/30/2011 3/31/2017 Swap Cash flow % 12/30/2011 3/31/2017 Swap Cash flow % 6/20/2011 6/20/2018 Swap Cash flow % 6/20/2011 6/20/2018 Swap Cash flow % 6/20/2011 6/20/2018 $ $ $ $ (a) Hedging unsecured variable rate debt by fixing 30 -day LIBOR. |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
FAIR VALUE MEASUREMENTS | |
Schedule of financial assets and liabilities carried at fair value | Financial assets and liabilities carried at fair value as of June 30, 2016 are classified in the table below in one of the three categories described above (in thousands): Level 1 Level 2 Level 3 Interest Rate Swap Derivative Liabilities $ — $ $ — Total liabilities at fair value $ — $ $ — Financial assets and liabilities carried at fair value as of December 31, 2015 are classified in the table below in one of the three categories described above (in thousands): Level 1 Level 2 Level 3 Interest Rate Swap Derivative Liabilities $ — $ $ — Total liabilities at fair value $ — $ $ — |
NONCONTROLLING INTERESTS (Table
NONCONTROLLING INTERESTS (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
NONCONTROLLING INTERESTS | |
Schedule of noncontrolling interests in subsidiaries | Date Opened / CubeSmart Number of Estimated Ownership June 30, 2016 Development Ventures Facilities Location Opening Interest Total Assets Total Liabilities 444 55 th Street Holdings, LLC ("55 th St") (1) 1 New York, NY Q1 2018 (est.) 90% $ $ 2880 Exterior St, LLC ("Exterior St") (2) 1 Bronx, NY Q2 2018 (est.) 51% 3068 Cropsey Avenue, LLC ("Cropsey Ave") (2) 1 Brooklyn, NY Q4 2017 (est.) 51% 2301 Tillotson Ave, LLC ("Tillotson") (2) 1 Bronx, NY Q2 2016 51% CS SNL New York Ave, LLC ("SNL I") (3) 1 Brooklyn, NY Q4 2015 90% 186 Jamaica Avenue, LLC ("SNL II") (3) 1 Brooklyn, NY Q4 2015 90% Shirlington Rd, LLC ("SRLLC") (3) 1 Arlington, VA Q2 2015 90% 7 $ $ |
ORGANIZATION AND NATURE OF OP32
ORGANIZATION AND NATURE OF OPERATIONS (Details) | 6 Months Ended |
Jun. 30, 2016statesegment | |
ORGANIZATION AND NATURE OF OPERATIONS | |
Number of states in which self-storage facilities are located | state | 22 |
Number of reportable segments | segment | 1 |
Percentage of the entity's partnership interest in Operating Partnership | 98.80% |
Common stock, conversion ratio | 1 |
SUMMARY OF SIGNIFICANT ACCOUN33
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Dec. 31, 2015 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Loan procurement costs, net of amortization | $ 2,475 | $ 2,800 |
Accounting Standards Update 2015-16 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Measurement period adjustments | 0 | |
Accounting Standards Update 2015-03 | Reclassifications | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Loan procurement costs, net of amortization | (10,700) | |
Debt | (10,700) | |
CubeSmart, L.P. and Subsidiaries | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Loan procurement costs, net of amortization | $ 2,475 | $ 2,800 |
STORAGE FACILITIES - Summary (D
STORAGE FACILITIES - Summary (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
STORAGE FACILITIES | ||
Storage facilities | $ 3,861,096 | $ 3,467,032 |
Less: Accumulated depreciation | (652,657) | (594,049) |
Storage facilities, net (including VIE assets of $203,341 and $136,274, respectively) | 3,208,439 | 2,872,983 |
Land | ||
STORAGE FACILITIES | ||
Storage facilities | 649,615 | 588,503 |
Buildings and improvements | ||
STORAGE FACILITIES | ||
Storage facilities | 2,778,802 | 2,534,193 |
Equipment | ||
STORAGE FACILITIES | ||
Storage facilities | 269,739 | 243,442 |
Construction in progress | ||
STORAGE FACILITIES | ||
Storage facilities | $ 162,940 | $ 100,894 |
STORAGE FACILITIES - Activity (
STORAGE FACILITIES - Activity (Details) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016USD ($)facility | Dec. 31, 2015USD ($)facility | |
2016 Acquisitions | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | facility | 17 | |
Purchase Price | $ | $ 270,925 | |
2016 Acquisitions | Metro DC Asset One | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | facility | 1 | |
Purchase Price | $ | $ 21,000 | |
2016 Acquisitions | Texas Asset Nineteen | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | facility | 2 | |
Purchase Price | $ | $ 24,800 | |
2016 Acquisitions | New York Asset Four | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | facility | 1 | |
Purchase Price | $ | $ 48,500 | |
2016 Acquisitions | Texas Asset Twenty | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | facility | 1 | |
Purchase Price | $ | $ 11,600 | |
2016 Acquisitions | Connecticut Asset | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | facility | 1 | |
Purchase Price | $ | $ 19,000 | |
2016 Acquisitions | Texas Asset Twenty-one | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | facility | 1 | |
Purchase Price | $ | $ 11,600 | |
2016 Acquisitions | Florida Assets Thirteen | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | facility | 3 | |
Purchase Price | $ | $ 47,925 | |
2016 Acquisitions | Colorado Asset Two | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | facility | 1 | |
Purchase Price | $ | $ 11,350 | |
2016 Acquisitions | Texas Asset Twenty-Two | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | facility | 1 | |
Purchase Price | $ | $ 11,600 | |
2016 Acquisitions | Texas Asset Twenty-Three | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | facility | 1 | |
Purchase Price | $ | $ 10,100 | |
2016 Acquisitions | Texas Asset Twenty-Four | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | facility | 1 | |
Purchase Price | $ | $ 10,800 | |
2016 Acquisitions | Illinois Asset Two | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | facility | 1 | |
Purchase Price | $ | $ 12,350 | |
2016 Acquisitions | Illinois Asset Three | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | facility | 1 | |
Purchase Price | $ | $ 16,000 | |
2016 Acquisitions | Massachusetts Asset Three | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | facility | 1 | |
Purchase Price | $ | $ 14,300 | |
2015 Acquisitions | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | facility | 29 | |
Purchase Price | $ | $ 292,362 | |
2015 Acquisitions | Texas Asset Seventeen | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | facility | 1 | |
Purchase Price | $ | $ 7,295 | |
2015 Acquisitions | HSRE Assets Two | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | facility | 4 | |
Purchase Price | $ | $ 27,500 | |
2015 Acquisitions | Arizona Asset Five | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | facility | 1 | |
Purchase Price | $ | $ 7,900 | |
2015 Acquisitions | Tennessee Assets | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | facility | 1 | |
Purchase Price | $ | $ 6,575 | |
2015 Acquisitions | Texas Asset Eighteen | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | facility | 1 | |
Purchase Price | $ | $ 15,795 | |
2015 Acquisitions | Florida Assets Eleven | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | facility | 1 | |
Purchase Price | $ | $ 7,300 | |
2015 Acquisitions | Arizona Asset Six | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | facility | 1 | |
Purchase Price | $ | $ 10,100 | |
2015 Acquisitions | Florida Assets Twelve | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | facility | 1 | |
Purchase Price | $ | $ 10,500 | |
2015 Acquisitions | Texas Asset Eight | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | facility | 1 | |
Purchase Price | $ | $ 14,200 | |
2015 Acquisitions | Maryland Asset Three | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | facility | 1 | |
Purchase Price | $ | $ 17,000 | |
2015 Acquisitions | Maryland Asset Four | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | facility | 1 | |
Purchase Price | $ | $ 19,200 | |
2015 Acquisitions | New York/New Jersey Assets | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | facility | 2 | |
Purchase Price | $ | $ 24,823 | |
2015 Acquisitions | New Jersey Assets | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | facility | 1 | |
Purchase Price | $ | $ 14,350 | |
2015 Acquisitions | PSI Assets | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | facility | 12 | |
Purchase Price | $ | $ 109,824 | |
Dispositions | ||
STORAGE FACILITIES | ||
Number of Facilities, dispositions (in properties) | facility | 8 | |
Sale Price | $ | $ 37,800 | |
Dispositions | Texas Asset One | ||
STORAGE FACILITIES | ||
Number of Facilities, dispositions (in properties) | facility | 7 | |
Sale Price | $ | $ 28,000 | |
Dispositions | Florida Assets | ||
STORAGE FACILITIES | ||
Number of Facilities, dispositions (in properties) | facility | 1 | |
Sale Price | $ | $ 9,800 |
INVESTMENT ACTIVITY (Details)
INVESTMENT ACTIVITY (Details) £ in Millions | Apr. 18, 2016USD ($)shares | Apr. 05, 2016USD ($) | Dec. 15, 2015USD ($)facility | Dec. 05, 2015USD ($) | Oct. 08, 2015USD ($)facility | Oct. 02, 2015GBP (£) | Oct. 02, 2015USD ($) | May 14, 2015USD ($)shares | Mar. 18, 2015USD ($)facility | Jan. 31, 2016facility | Dec. 31, 2015USD ($)facility | Nov. 30, 2015USD ($)facility | Jun. 30, 2014USD ($)facility | Jun. 30, 2016USD ($)shares | Mar. 31, 2016USD ($) | Dec. 31, 2015USD ($)itemfacility | Jun. 30, 2015USD ($) | Jun. 30, 2016USD ($)propertyfacility | Jun. 30, 2015USD ($) | Dec. 31, 2015USD ($)propertyfacility | Dec. 31, 2014USD ($)facility | Dec. 31, 2008 |
Self-storage facilities | ||||||||||||||||||||||
Development costs | $ 136,800,000 | $ 136,800,000 | ||||||||||||||||||||
Expected construction cost | 218,200,000 | |||||||||||||||||||||
Storage facilities | $ 3,467,032,000 | 3,861,096,000 | $ 3,467,032,000 | 3,861,096,000 | $ 3,467,032,000 | |||||||||||||||||
Restricted cash | 24,600,000 | 9,017,000 | 24,600,000 | 9,017,000 | 24,600,000 | |||||||||||||||||
OP units issued (in shares) | shares | 61,224 | 20,408 | ||||||||||||||||||||
Issuance of OP Units | $ 1,500,000 | $ 500,000 | ||||||||||||||||||||
Summary of the amounts of revenue and earnings of the 2016 and 2015 acquisitions since the acquisition dates | ||||||||||||||||||||||
Total revenue | 3,250,000 | $ 1,524,000 | 4,398,000 | $ 1,743,000 | ||||||||||||||||||
Net loss | $ (2,799,000) | (1,146,000) | (3,976,000) | (1,124,000) | ||||||||||||||||||
USIFB, LLP | ||||||||||||||||||||||
Self-storage facilities | ||||||||||||||||||||||
Aggregate sale price | £ 6.5 | $ 9,900,000 | ||||||||||||||||||||
Proceeds from Sale of Real Estate Held-for-investment | $ 7,000,000 | |||||||||||||||||||||
Number of assets sold | facility | 1 | |||||||||||||||||||||
Ownership interest held by the entity (as a percent) | 97.00% | |||||||||||||||||||||
Gain from sale of real estate | 3,000,000 | |||||||||||||||||||||
Foreign currency translation loss | $ (1,200,000) | |||||||||||||||||||||
Self-storage facilities located in New York | ||||||||||||||||||||||
Self-storage facilities | ||||||||||||||||||||||
Number of self-storage facilities | facility | 2 | |||||||||||||||||||||
Number of joint ventures | item | 2 | |||||||||||||||||||||
Storage facilities | 32,200,000 | $ 32,200,000 | $ 32,200,000 | |||||||||||||||||||
Ownership interest held by the entity (as a percent) | 90.00% | |||||||||||||||||||||
Self-storage facilities located in New York | PSI | ||||||||||||||||||||||
Self-storage facilities | ||||||||||||||||||||||
Number of facilities under contract | 3 | |||||||||||||||||||||
Self-storage Facility in Arlington, VA | ||||||||||||||||||||||
Self-storage facilities | ||||||||||||||||||||||
Storage facilities | $ 17,100,000 | $ 17,100,000 | ||||||||||||||||||||
Ownership interest held by the entity (as a percent) | 90.00% | |||||||||||||||||||||
Self-storage Facility in Washington DC | PSI | ||||||||||||||||||||||
Self-storage facilities | ||||||||||||||||||||||
OP units issued (in shares) | shares | 61,224 | |||||||||||||||||||||
Issuance of OP Units | $ 1,500,000 | |||||||||||||||||||||
Self-storage Facility In North Palm Beach, FL | PSI | ||||||||||||||||||||||
Self-storage facilities | ||||||||||||||||||||||
Number of facilities under contract | 1 | |||||||||||||||||||||
Self-storage Facility in Queens, NY | ||||||||||||||||||||||
Self-storage facilities | ||||||||||||||||||||||
Development costs | $ 31,800,000 | |||||||||||||||||||||
Ownership interest held by the entity (as a percent) | 51.00% | |||||||||||||||||||||
Minority ownership interest (as a percent) | 49.00% | |||||||||||||||||||||
Amount of net proceeds applied to acquisitions closed during the year | $ 12,500,000 | |||||||||||||||||||||
Self-storage Facility in Bronx, NY | ||||||||||||||||||||||
Self-storage facilities | ||||||||||||||||||||||
Development costs | $ 32,200,000 | $ 32,200,000 | ||||||||||||||||||||
Ownership interest held by the entity (as a percent) | 51.00% | |||||||||||||||||||||
2016 Acquisitions | ||||||||||||||||||||||
Self-storage facilities | ||||||||||||||||||||||
Number of self-storage facilities acquired | facility | 17 | |||||||||||||||||||||
Aggregate purchase price | $ 270,925,000 | |||||||||||||||||||||
Intangible value of the in-place leases | $ 9,800,000 | $ 9,800,000 | ||||||||||||||||||||
Estimated life | 12 months | |||||||||||||||||||||
Amortization expense | $ 3,000,000 | |||||||||||||||||||||
Number of properties, assumed mortgage | facility | 1 | |||||||||||||||||||||
Assumed mortgage debt, at fair value | 6,500,000 | $ 6,500,000 | ||||||||||||||||||||
Outstanding principal balance of mortgage debt assumed on acquisitions | 6,300,000 | 6,300,000 | ||||||||||||||||||||
Premium on debt assumed on acquisitions | 200,000 | 200,000 | ||||||||||||||||||||
2016 Acquisitions | Self storage under construction | ||||||||||||||||||||||
Self-storage facilities | ||||||||||||||||||||||
Number of facilities under contract | 3 | |||||||||||||||||||||
2015 Acquisitions | ||||||||||||||||||||||
Self-storage facilities | ||||||||||||||||||||||
Number of self-storage facilities acquired | facility | 29 | |||||||||||||||||||||
Aggregate purchase price | $ 292,362,000 | |||||||||||||||||||||
2015 Acquisitions | PSI | ||||||||||||||||||||||
Self-storage facilities | ||||||||||||||||||||||
Intangible value of the in-place leases | $ 6,700,000 | |||||||||||||||||||||
Estimated life | 12 months | |||||||||||||||||||||
Amortization expense | 3,400,000 | |||||||||||||||||||||
2015 Acquisitions | HSRE | ||||||||||||||||||||||
Self-storage facilities | ||||||||||||||||||||||
Number of self-storage facilities | facility | 26 | |||||||||||||||||||||
Number of self-storage facilities acquired | facility | 4 | 22 | ||||||||||||||||||||
Aggregate purchase price | $ 223,000,000 | |||||||||||||||||||||
Intangible value of the in-place leases | $ 2,700,000 | |||||||||||||||||||||
Estimated life | 12 months | |||||||||||||||||||||
Amortization expense | 700,000 | |||||||||||||||||||||
Aggregate purchase price of facilities closed | $ 27,500,000 | $ 195,500,000 | ||||||||||||||||||||
2015 Acquisitions | Self storage in operation | PSI | ||||||||||||||||||||||
Self-storage facilities | ||||||||||||||||||||||
Cash paid for acquisition | $ 109,800,000 | |||||||||||||||||||||
Cash paid for acquisition of remaining interest in real estate ventures | $ 109,800,000 | |||||||||||||||||||||
2015 Acquisitions | Self storage under construction | PSI | ||||||||||||||||||||||
Self-storage facilities | ||||||||||||||||||||||
Number of self-storage facilities | facility | 1 | |||||||||||||||||||||
Cash paid for acquisition | $ 6,000,000 | |||||||||||||||||||||
Cash paid for acquisition of remaining interest in real estate ventures | $ 6,000,000 | |||||||||||||||||||||
2015 Acquisitions | Self-storage facilities located in US | ||||||||||||||||||||||
Self-storage facilities | ||||||||||||||||||||||
Number of self-storage facilities | facility | 13 | |||||||||||||||||||||
Aggregate purchase price | $ 155,000,000 | |||||||||||||||||||||
Intangible value of the in-place leases | 10,700,000 | $ 10,700,000 | $ 10,700,000 | |||||||||||||||||||
Estimated life | 12 months | |||||||||||||||||||||
Amortization expense | 4,800,000 | |||||||||||||||||||||
Number of properties, assumed mortgage | facility | 1 | |||||||||||||||||||||
Assumed mortgage debt, at fair value | 2,700,000 | 2,700,000 | $ 2,700,000 | |||||||||||||||||||
Outstanding principal balance of mortgage debt assumed on acquisitions | 2,500,000 | 2,500,000 | 2,500,000 | |||||||||||||||||||
Premium on debt assumed on acquisitions | 200,000 | 200,000 | 200,000 | |||||||||||||||||||
Real Estate Acquisition Expected in 2017 | ||||||||||||||||||||||
Self-storage facilities | ||||||||||||||||||||||
Deposit | 1,500,000 | 1,500,000 | ||||||||||||||||||||
Number of facilities under contract | 3 | |||||||||||||||||||||
Number of facilities with a loan outstanding | facility | 1 | |||||||||||||||||||||
Expected aggregate purchase or sales price | $ 43,300,000 | $ 43,300,000 | ||||||||||||||||||||
Note receivable | $ 0 | $ 4,100,000 | $ 0 | $ 0 | ||||||||||||||||||
2015 Dispositions | USIFB, LLP | ||||||||||||||||||||||
Self-storage facilities | ||||||||||||||||||||||
Aggregate sale price | £ 6.5 | $ 9,900,000 | ||||||||||||||||||||
Ownership interest held by the entity (as a percent) | 97.00% | 97.00% | ||||||||||||||||||||
Gain from sale of real estate | $ 3,000,000 | |||||||||||||||||||||
Foreign currency translation loss | $ 1,200,000 | |||||||||||||||||||||
2015 Dispositions | Properties in Texas and Florida | ||||||||||||||||||||||
Self-storage facilities | ||||||||||||||||||||||
Aggregate sale price | $ 37,800,000 | |||||||||||||||||||||
Number of facilities sold, transaction completed | facility | 2 | 1 | 3 | |||||||||||||||||||
Amount of net proceeds applied to acquisitions closed during the year | $ 36,400,000 | |||||||||||||||||||||
Gain from sale of real estate | $ 14,400,000 | |||||||||||||||||||||
Self-storage facilities | ||||||||||||||||||||||
Self-storage facilities | ||||||||||||||||||||||
Number of self-storage facilities acquired | property | 17 | 29 | ||||||||||||||||||||
Aggregate purchase price | $ 270,900,000 | $ 292,400,000 | ||||||||||||||||||||
Self-storage facilities | 2016 Acquisitions | ||||||||||||||||||||||
Self-storage facilities | ||||||||||||||||||||||
Number of self-storage facilities | facility | 17 | |||||||||||||||||||||
Self-storage facilities | 2015 Acquisitions | PSI | ||||||||||||||||||||||
Self-storage facilities | ||||||||||||||||||||||
Number of self-storage facilities | facility | 12 | |||||||||||||||||||||
Cash paid for acquisition | $ 115,800,000 | |||||||||||||||||||||
Cash paid for acquisition of remaining interest in real estate ventures | $ 115,800,000 | |||||||||||||||||||||
Texas | 2015 Dispositions | Properties in Texas and Florida | ||||||||||||||||||||||
Self-storage facilities | ||||||||||||||||||||||
Number of self-storage facilities | facility | 7 | |||||||||||||||||||||
Florida | 2015 Dispositions | Properties in Texas and Florida | ||||||||||||||||||||||
Self-storage facilities | ||||||||||||||||||||||
Number of self-storage facilities | facility | 1 |
INVESTMENT IN UNCONSOLIDATED 37
INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURE (Details) $ in Thousands | Jun. 15, 2016USD ($)facility | Apr. 21, 2016USD ($)facility | Mar. 30, 2016USD ($)facility | Jan. 26, 2016USD ($)facility | Dec. 08, 2015USD ($)facility | May 01, 2014USD ($)property | Dec. 10, 2013USD ($)property | Jun. 30, 2016USD ($) | Dec. 31, 2015USD ($)facility | Jun. 30, 2015USD ($) | Jun. 30, 2016USD ($)facility | Jun. 30, 2015USD ($) | Mar. 31, 2016USD ($)facility |
Investment in Unconsolidated Real Estate Venture | |||||||||||||
Investment in real estate entities | $ 99,915 | $ 97,281 | $ 99,915 | ||||||||||
Acquisitions of storage facilities | 235,577 | $ 85,627 | |||||||||||
Summary of results of operations of the real estate venture | |||||||||||||
Company’s share of net income (loss) | (724) | $ (100) | $ (1,236) | (338) | |||||||||
HVP | |||||||||||||
Investment in Unconsolidated Real Estate Venture | |||||||||||||
Ownership interest in partnership (as a percent) | 10.00% | ||||||||||||
Number of self-storage facilities acquired | facility | 1 | 5 | 30 | 1 | 30 | ||||||||
Number of self-storage facilities acquired, assumed mortgage debt | facility | 6 | ||||||||||||
Acquisitions of storage facilities | $ 7,000 | $ 36,100 | $ 112,800 | $ 5,700 | $ 193,700 | ||||||||
Number of properties to be acquired under the contract | facility | 37 | 31 | |||||||||||
Contract amount to purchase real estate | $ 242,500 | $ 115,500 | |||||||||||
Intangible value of the in-place leases | 10,300 | $ 18,900 | |||||||||||
Assumed mortgage debt, at fair value | 25,300 | $ 25,300 | |||||||||||
Outstanding principal balance of mortgage debt assumed on acquisitions | 23,700 | 23,700 | |||||||||||
Premium on debt assumed on one of the acquisitions | 1,600 | 1,600 | |||||||||||
HVP | Affiliated Real Estate Investment Transactions | |||||||||||||
Investment in Unconsolidated Real Estate Venture | |||||||||||||
Number of properties to be acquired under the contract | facility | 4 | ||||||||||||
Michigan | HVP | |||||||||||||
Investment in Unconsolidated Real Estate Venture | |||||||||||||
Number of properties to be acquired under the contract | facility | 17 | ||||||||||||
Massachusetts | HVP | |||||||||||||
Investment in Unconsolidated Real Estate Venture | |||||||||||||
Number of properties to be acquired under the contract | facility | 7 | ||||||||||||
Florida | HVP | |||||||||||||
Investment in Unconsolidated Real Estate Venture | |||||||||||||
Number of properties to be acquired under the contract | facility | 3 | ||||||||||||
South Carolina | HVP | |||||||||||||
Investment in Unconsolidated Real Estate Venture | |||||||||||||
Number of properties to be acquired under the contract | facility | 22 | ||||||||||||
Georgia | HVP | |||||||||||||
Investment in Unconsolidated Real Estate Venture | |||||||||||||
Number of properties to be acquired under the contract | facility | 5 | ||||||||||||
HVP and HHF | |||||||||||||
Assets | |||||||||||||
Storage facilities, net | 594,334 | $ 456,452 | 594,334 | ||||||||||
Other assets | 24,344 | 17,536 | 24,344 | ||||||||||
Total Assets | 618,678 | 473,988 | 618,678 | ||||||||||
Liabilities and equity | |||||||||||||
Other liabilities | 7,608 | 4,470 | 7,608 | ||||||||||
Debt | 299,815 | 210,525 | 299,815 | ||||||||||
Equity | |||||||||||||
CubeSmart | 99,915 | 97,281 | 99,915 | ||||||||||
Joint venture partner | 211,340 | 161,712 | 211,340 | ||||||||||
Total liabilities and equity | 618,678 | 473,988 | 618,678 | ||||||||||
Summary of results of operations of the real estate venture | |||||||||||||
Total revenues | 16,659 | 7,465 | 28,983 | 14,525 | |||||||||
Operating expenses | 7,420 | 3,174 | 13,862 | 6,227 | |||||||||
Interest expense, net | 2,469 | 931 | 4,324 | 1,862 | |||||||||
Depreciation and amortization | 14,436 | 3,560 | 24,186 | 7,112 | |||||||||
Net income (loss) | (7,666) | (200) | (13,389) | (676) | |||||||||
Company’s share of net income (loss) | (724) | $ (100) | (1,236) | $ (338) | |||||||||
HVP | |||||||||||||
Investment in Unconsolidated Real Estate Venture | |||||||||||||
Investment in real estate entities | $ 16,000 | $ 16,000 | |||||||||||
Investment in joint venture | 5,300 | 10,700 | |||||||||||
Initial advance | 61,800 | 116,000 | |||||||||||
Venture's loan | $ 122,000 | ||||||||||||
HVP | Maximum | |||||||||||||
Investment in Unconsolidated Real Estate Venture | |||||||||||||
Venture's loan | $ 185,500 | ||||||||||||
HVP | LIBOR | |||||||||||||
Investment in Unconsolidated Real Estate Venture | |||||||||||||
Interest rate (as percentage) | 2.00% | 2.00% | |||||||||||
HVP | Tennessee | |||||||||||||
Investment in Unconsolidated Real Estate Venture | |||||||||||||
Number of properties to be acquired under the contract | facility | 10 | ||||||||||||
HHF | |||||||||||||
Investment in Unconsolidated Real Estate Venture | |||||||||||||
Ownership interest in partnership (as a percent) | 50.00% | ||||||||||||
Number of storage facilities owned by investee | property | 35 | ||||||||||||
Payment made for acquisition of interest in real estate ventures | $ 315,700 | ||||||||||||
Intangible value of the in-place leases | $ 12,100 | ||||||||||||
Proceeds after closing costs distributed proportionately to partners | $ 99,200 | ||||||||||||
HHF | Secured loan 3.59% due April 30, 2021 | |||||||||||||
Investment in Unconsolidated Real Estate Venture | |||||||||||||
Amount of loan obtained | $ 100,000 | ||||||||||||
Interest on real estate venture debt | 3.59% | ||||||||||||
HHF | Texas | |||||||||||||
Investment in Unconsolidated Real Estate Venture | |||||||||||||
Number of storage facilities owned by investee | property | 34 | 34 | |||||||||||
HHF | North Carolina | |||||||||||||
Investment in Unconsolidated Real Estate Venture | |||||||||||||
Number of storage facilities owned by investee | property | 1 |
UNSECURED SENIOR NOTES (Details
UNSECURED SENIOR NOTES (Details) $ in Thousands | 6 Months Ended | ||||
Jun. 30, 2016USD ($) | Dec. 31, 2015USD ($) | Oct. 26, 2015USD ($) | Dec. 17, 2013USD ($) | Jun. 26, 2012USD ($) | |
Mortgage loans and Notes payable | |||||
Loan procurement costs, net of amortization | $ 2,475 | $ 2,800 | |||
Senior Notes | |||||
Mortgage loans and Notes payable | |||||
Loan procurement costs, net of amortization | $ 7,600 | $ 8,100 | |||
Senior Notes | Maximum | |||||
Mortgage loans and Notes payable | |||||
Consolidated leverage ratio | 0.60 | ||||
Secured debt leverage ratio | 0.40 | ||||
Senior Notes | Minimum | |||||
Mortgage loans and Notes payable | |||||
Consolidated interest coverage ratio | 1.50 | ||||
Financial and customary covenant, minimum unencumbered asset (as a percent) | 150.00% | ||||
Senior notes 4.00% due November 15, 2025 | |||||
Mortgage loans and Notes payable | |||||
Senior notes, principal amount | $ 250,000 | ||||
Interest rate (as a percent) | 4.00% | ||||
Senior notes 4.375% due December 15, 2023 | |||||
Mortgage loans and Notes payable | |||||
Senior notes, principal amount | $ 250,000 | ||||
Interest rate (as a percent) | 4.375% | ||||
Senior notes 4.80% due July 15, 2022 | |||||
Mortgage loans and Notes payable | |||||
Senior notes, principal amount | $ 250,000 | ||||
Interest rate (as a percent) | 4.80% |
REVOLVING CREDIT FACILITY AND39
REVOLVING CREDIT FACILITY AND UNSECURED TERM LOANS (Details) | Apr. 22, 2015USD ($) | Apr. 21, 2015USD ($) | Dec. 17, 2013USD ($) | Jun. 20, 2011USD ($) | Jun. 30, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 09, 2011USD ($) |
SECURED CREDIT FACILITY, UNSECURED CREDIT FACILITY AND SECURED TERM LOANS | |||||||
Loan procurement costs, net of amortization | $ 2,475,000 | $ 2,800,000 | |||||
Unsecured term loan borrowings outstanding | 398,466,000 | 398,183,000 | |||||
Term Loan Facility | |||||||
SECURED CREDIT FACILITY, UNSECURED CREDIT FACILITY AND SECURED TERM LOANS | |||||||
Loan procurement costs capitalized | 2,300,000 | ||||||
Loan procurement costs, net of amortization | $ 1,500,000 | 1,800,000 | |||||
Write off of unamortized cost | $ 100,000 | ||||||
Net proceeds from equity issuances added to minimum tangible net worth (as a percent) | 75.00% | ||||||
Term Loan Facility | Minimum | |||||||
SECURED CREDIT FACILITY, UNSECURED CREDIT FACILITY AND SECURED TERM LOANS | |||||||
Fixed charge coverage ratio | 1.50 | ||||||
Tangible net worth | $ 821,211,200 | ||||||
Term Loan Facility | Maximum | |||||||
SECURED CREDIT FACILITY, UNSECURED CREDIT FACILITY AND SECURED TERM LOANS | |||||||
Total indebtedness to total asset value ratio (as a percent) | 60.00% | ||||||
Percentage of funds from operations that can be distributed on common shares | 95.00% | ||||||
Term Loan Facility | Term Loan A | |||||||
SECURED CREDIT FACILITY, UNSECURED CREDIT FACILITY AND SECURED TERM LOANS | |||||||
Maximum borrowing capacity | $ 100,000,000 | ||||||
Term of debt instrument | 5 years | ||||||
Term Loan Facility | Term Loan A | Baa2/BBB | |||||||
SECURED CREDIT FACILITY, UNSECURED CREDIT FACILITY AND SECURED TERM LOANS | |||||||
Interest rate, basis spread (as a percent) | 1.30% | ||||||
Variable interest rate basis | LIBOR | ||||||
Term Loan Facility | Term Loan B | |||||||
SECURED CREDIT FACILITY, UNSECURED CREDIT FACILITY AND SECURED TERM LOANS | |||||||
Maximum borrowing capacity | $ 100,000,000 | ||||||
Term of debt instrument | 7 years | ||||||
Term Loan Facility | Term Loan B | Baa2/BBB | |||||||
SECURED CREDIT FACILITY, UNSECURED CREDIT FACILITY AND SECURED TERM LOANS | |||||||
Interest rate, basis spread (as a percent) | 1.15% | ||||||
Variable interest rate basis | LIBOR | ||||||
Term Loan Facility | Unsecured term loan | |||||||
SECURED CREDIT FACILITY, UNSECURED CREDIT FACILITY AND SECURED TERM LOANS | |||||||
Unsecured term loan borrowings outstanding | $ 200,000,000 | ||||||
Credit Facility | |||||||
SECURED CREDIT FACILITY, UNSECURED CREDIT FACILITY AND SECURED TERM LOANS | |||||||
Effective weighted average interest rate (as a percent) | 2.41% | ||||||
Net proceeds from equity issuances added to minimum tangible net worth (as a percent) | 75.00% | ||||||
Credit Facility | Minimum | |||||||
SECURED CREDIT FACILITY, UNSECURED CREDIT FACILITY AND SECURED TERM LOANS | |||||||
Fixed charge coverage ratio | 1.50 | ||||||
Tangible net worth | $ 821,211,200 | ||||||
Credit Facility | Maximum | |||||||
SECURED CREDIT FACILITY, UNSECURED CREDIT FACILITY AND SECURED TERM LOANS | |||||||
Total indebtedness to total asset value ratio (as a percent) | 60.00% | ||||||
Percentage of funds from operations that can be distributed on common shares | 95.00% | ||||||
Credit Facility | Revolver | |||||||
SECURED CREDIT FACILITY, UNSECURED CREDIT FACILITY AND SECURED TERM LOANS | |||||||
Maximum borrowing capacity | $ 500,000,000 | $ 300,000,000 | $ 300,000,000 | ||||
Interest rate, basis spread (as a percent) | 1.25% | ||||||
Variable interest rate basis | LIBOR | ||||||
Facility fee (as a percent) | 0.15% | 0.20% | 0.15% | ||||
Unsecured term loan borrowings outstanding | $ 150,000,000 | ||||||
Remaining borrowing capacity | $ 350,000,000 | ||||||
Credit Facility | Term Loan C | |||||||
SECURED CREDIT FACILITY, UNSECURED CREDIT FACILITY AND SECURED TERM LOANS | |||||||
Maximum borrowing capacity | 100,000,000 | ||||||
Repayment of outstanding debt | $ 100,000,000 | ||||||
Credit Facility | Term Loan D | |||||||
SECURED CREDIT FACILITY, UNSECURED CREDIT FACILITY AND SECURED TERM LOANS | |||||||
Maximum borrowing capacity | $ 200,000,000 | ||||||
Interest rate, basis spread (as a percent) | 1.30% | ||||||
Credit Facility | Unsecured term loan | |||||||
SECURED CREDIT FACILITY, UNSECURED CREDIT FACILITY AND SECURED TERM LOANS | |||||||
Unsecured term loan borrowings outstanding | $ 200,000,000 |
MORTGAGE LOANS AND NOTES PAYA40
MORTGAGE LOANS AND NOTES PAYABLE - Summary (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Mortgage loans and Notes payable | ||
Less: Loan procurement costs, net | $ (2,475) | $ (2,800) |
Total mortgage loans and notes payable | 138,716 | 111,455 |
Net book value of self-storage facilities | 3,208,439 | 2,872,983 |
Mortgages | ||
Mortgage loans and Notes payable | ||
Carrying value | 135,186 | 109,993 |
Plus: Unamortized fair value adjustment | 4,375 | 2,219 |
Less: Loan procurement costs, net | (845) | (757) |
Total mortgage loans and notes payable | 138,716 | 111,455 |
Net book value of self-storage facilities | $ 244,800 | 195,400 |
YSI 59 | ||
Mortgage loans and Notes payable | ||
Carrying value | 9,012 | |
Effective interest rate (as a percent) | 4.82% | |
YSI 60 | ||
Mortgage loans and Notes payable | ||
Carrying value | 3,546 | |
Effective interest rate (as a percent) | 5.04% | |
YSI 51 | ||
Mortgage loans and Notes payable | ||
Carrying value | $ 6,921 | 6,984 |
Effective interest rate (as a percent) | 5.15% | |
YSI 64 | ||
Mortgage loans and Notes payable | ||
Carrying value | $ 7,710 | 7,781 |
Effective interest rate (as a percent) | 3.54% | |
YSI 62 | ||
Mortgage loans and Notes payable | ||
Carrying value | $ 7,769 | 7,835 |
Effective interest rate (as a percent) | 3.54% | |
YSI 67 | ||
Mortgage loans and Notes payable | ||
Carrying value | $ 6,291 | |
Effective interest rate (as a percent) | 2.55% | |
YSI 33 | ||
Mortgage loans and Notes payable | ||
Carrying value | $ 10,009 | 10,154 |
Effective interest rate (as a percent) | 6.42% | |
YSI 26 | ||
Mortgage loans and Notes payable | ||
Carrying value | $ 8,515 | 8,606 |
Effective interest rate (as a percent) | 4.56% | |
YSI 57 | ||
Mortgage loans and Notes payable | ||
Carrying value | $ 2,989 | 3,021 |
Effective interest rate (as a percent) | 4.61% | |
YSI 55 | ||
Mortgage loans and Notes payable | ||
Carrying value | $ 23,163 | 23,369 |
Effective interest rate (as a percent) | 4.85% | |
YSI 24 | ||
Mortgage loans and Notes payable | ||
Carrying value | $ 26,830 | 27,185 |
Effective interest rate (as a percent) | 4.64% | |
YSI 65 | ||
Mortgage loans and Notes payable | ||
Carrying value | $ 2,479 | $ 2,500 |
Effective interest rate (as a percent) | 3.85% | |
YSI 66 | ||
Mortgage loans and Notes payable | ||
Carrying value | $ 32,510 | |
Effective interest rate (as a percent) | 3.51% |
MORTGAGE LOANS AND NOTES PAYA41
MORTGAGE LOANS AND NOTES PAYABLE - Future Payments (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Future principal payment requirements on the outstanding mortgage loans and notes payable at year end | ||
Less: Loan procurement costs, net | $ (2,475) | $ (2,800) |
Total mortgage indebtedness | 138,716 | 111,455 |
Mortgages | ||
Future principal payment requirements on the outstanding mortgage loans and notes payable at year end | ||
2,016 | 23,601 | |
2,017 | 8,576 | |
2,018 | 2,490 | |
2,019 | 11,485 | |
2,020 | 12,615 | |
2021 and thereafter | 76,419 | |
Total mortgage payments | 135,186 | 109,993 |
Plus: Unamortized fair value adjustment | 4,375 | 2,219 |
Less: Loan procurement costs, net | (845) | (757) |
Total mortgage indebtedness | $ 138,716 | $ 111,455 |
ACCUMULATED OTHER COMPREHENSI42
ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Changes in accumulated other comprehensive income by component | |
Beginning balance | $ (4,978) |
Ending balance | (4,623) |
Unrealized losses on interest rate swaps | |
Changes in accumulated other comprehensive income by component | |
Beginning balance | (4,978) |
Other comprehensive loss before reclassifications | (2,208) |
Amounts reclassified from accumulated other comprehensive loss | 2,563 |
Net current-period other comprehensive income (loss) | 355 |
Ending balance | $ (4,623) |
RISK MANAGEMENT AND USE OF FI43
RISK MANAGEMENT AND USE OF FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Dec. 31, 2015 | |
Derivative financial instruments | ||
Unrealized losses reclassified from accumulated other comprehensive loss | $ 2,600 | |
Amount estimated to be reclassified as an increase to interest expense | 3,300 | |
Designated | Cash flow | ||
Derivative financial instruments | ||
Notional Amount | 300,000 | $ 400,000 |
Fair Value | $ (5,086) | (5,445) |
Maximum number of days outstanding to have the option to borrow at the LIBOR | 30 days | |
Designated | Cash flow | Hedge Product, Swap one | ||
Derivative financial instruments | ||
Notional Amount | 40,000 | |
Swap, Strike rate (as a percent) | 1.8025% | |
Fair Value | (243) | |
Designated | Cash flow | Hedge Product, Swap two | ||
Derivative financial instruments | ||
Notional Amount | 40,000 | |
Swap, Strike rate (as a percent) | 1.8025% | |
Fair Value | (243) | |
Designated | Cash flow | Hedge Product, Swap three | ||
Derivative financial instruments | ||
Notional Amount | 20,000 | |
Swap, Strike rate (as a percent) | 1.8025% | |
Fair Value | (122) | |
Designated | Cash flow | Hedge Product, Swap four | ||
Derivative financial instruments | ||
Notional Amount | $ 75,000 | 75,000 |
Swap, Strike rate (as a percent) | 1.336% | |
Fair Value | $ (487) | (540) |
Designated | Cash flow | Hedge Product, Swap five | ||
Derivative financial instruments | ||
Notional Amount | $ 50,000 | 50,000 |
Swap, Strike rate (as a percent) | 1.336% | |
Fair Value | $ (325) | (360) |
Designated | Cash flow | Hedge Product, Swap six | ||
Derivative financial instruments | ||
Notional Amount | $ 50,000 | 50,000 |
Swap, Strike rate (as a percent) | 1.336% | |
Fair Value | $ (325) | (360) |
Designated | Cash flow | Hedge Product, Swap seven | ||
Derivative financial instruments | ||
Notional Amount | $ 25,000 | 25,000 |
Swap, Strike rate (as a percent) | 1.3375% | |
Fair Value | $ (162) | (180) |
Designated | Cash flow | Hedge Product, Swap eight | ||
Derivative financial instruments | ||
Notional Amount | $ 40,000 | 40,000 |
Swap, Strike rate (as a percent) | 2.459% | |
Fair Value | $ (1,508) | (1,350) |
Designated | Cash flow | Hedge Product, Swap nine | ||
Derivative financial instruments | ||
Notional Amount | $ 40,000 | 40,000 |
Swap, Strike rate (as a percent) | 2.4725% | |
Fair Value | $ (1,519) | (1,364) |
Designated | Cash flow | Hedge Product, Swap ten | ||
Derivative financial instruments | ||
Notional Amount | $ 20,000 | 20,000 |
Swap, Strike rate (as a percent) | 2.475% | |
Fair Value | $ (760) | $ (683) |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016USD ($)item | Dec. 31, 2015USD ($) | |
Fair value of financial assets and liabilities carried at fair value | ||
Aggregate carrying value of total debt | $ 1,400,000 | $ 1,300,000 |
Estimated fair value of total debt | $ 1,500,000 | 1,300,000 |
Interest rate swap | ||
Fair value of financial assets and liabilities carried at fair value | ||
Number of counterparties to derivative contracts who experienced significant downgrades in 2016 | item | 0 | |
Level 2 | ||
Fair value of financial assets and liabilities carried at fair value | ||
Total liabilities at fair value | $ 5,086 | 5,445 |
Level 2 | Interest rate swap | ||
Fair value of financial assets and liabilities carried at fair value | ||
Derivative Liabilities | $ 5,086 | $ 5,445 |
NONCONTROLLING INTERESTS - Inte
NONCONTROLLING INTERESTS - Interests in Consolidated Real Estate Joint Ventures (Details) $ in Thousands, £ in Millions | Oct. 02, 2015GBP (£) | Oct. 02, 2015USD ($) | Jun. 30, 2014USD ($)facility | Dec. 31, 2015USD ($) | Jun. 30, 2016USD ($)facility | Jun. 30, 2015USD ($) | Dec. 31, 2008property | Dec. 31, 2013GBP (£) | Dec. 31, 2013USD ($) |
Interests in Consolidated Real Estate Joint Ventures | |||||||||
Reduction to additional paid in capital | $ 4,396 | $ 178 | |||||||
2880 Exterior St. LLC | |||||||||
Interests in Consolidated Real Estate Joint Ventures | |||||||||
Option to call ownership interest of another member | 37,800 | ||||||||
Accretion liability | 6,300 | ||||||||
3068 Cropsey Ave LLC | |||||||||
Interests in Consolidated Real Estate Joint Ventures | |||||||||
Option to call ownership interest of another member | 20,400 | ||||||||
Accretion liability | 6,800 | ||||||||
2301 Tillotson Ave LLC | |||||||||
Interests in Consolidated Real Estate Joint Ventures | |||||||||
Option to call ownership interest of another member | 17,000 | ||||||||
Accretion liability | $ 17,000 | ||||||||
VIE | |||||||||
Interests in Consolidated Real Estate Joint Ventures | |||||||||
Number of self-storage facilities owned and operated | facility | 7 | ||||||||
Total assets | $ 198,292 | ||||||||
Total liabilities | $ 102,279 | ||||||||
Period of option to call ownership interest of another member | 1 year | ||||||||
Period of option to put ownership interest in venture | 1 year | ||||||||
VIE | 444 55th Street Holdings, LLC | |||||||||
Interests in Consolidated Real Estate Joint Ventures | |||||||||
Number of self-storage facilities owned and operated | facility | 1 | ||||||||
Ownership interest held by the entity (as a percent) | 90.00% | ||||||||
Total assets | $ 76,991 | ||||||||
Total liabilities | 35,079 | ||||||||
Assumed mortgage debt, at fair value | 35,000 | ||||||||
Outstanding principal balance of mortgage debt assumed on acquisitions | 32,500 | ||||||||
Premium on debt assumed on one of the acquisitions | $ 2,500 | ||||||||
Interest rate (as a percent) | 4.68% | ||||||||
VIE | 2880 Exterior St. LLC | |||||||||
Interests in Consolidated Real Estate Joint Ventures | |||||||||
Number of self-storage facilities owned and operated | facility | 1 | ||||||||
Ownership interest held by the entity (as a percent) | 51.00% | ||||||||
Total assets | $ 25,670 | ||||||||
Total liabilities | 6,295 | ||||||||
Option to put ownership interest in the venture | $ 37,800 | ||||||||
VIE | 3068 Cropsey Ave LLC | |||||||||
Interests in Consolidated Real Estate Joint Ventures | |||||||||
Number of self-storage facilities owned and operated | facility | 1 | ||||||||
Ownership interest held by the entity (as a percent) | 51.00% | ||||||||
Total assets | $ 16,401 | ||||||||
Total liabilities | 7,718 | ||||||||
Option to put ownership interest in the venture | $ 20,400 | ||||||||
VIE | 2301 Tillotson Ave LLC | |||||||||
Interests in Consolidated Real Estate Joint Ventures | |||||||||
Number of self-storage facilities owned and operated | facility | 1 | ||||||||
Ownership interest held by the entity (as a percent) | 51.00% | ||||||||
Total assets | $ 31,330 | ||||||||
Total liabilities | 19,392 | ||||||||
Option to put ownership interest in the venture | $ 17,000 | ||||||||
VIE | CS SNL New York Ave LLC | |||||||||
Interests in Consolidated Real Estate Joint Ventures | |||||||||
Number of self-storage facilities owned and operated | facility | 1 | ||||||||
Ownership interest held by the entity (as a percent) | 90.00% | ||||||||
Total assets | $ 13,753 | ||||||||
Total liabilities | $ 9,256 | ||||||||
VIE | 186 Jamaica Ave LLC | |||||||||
Interests in Consolidated Real Estate Joint Ventures | |||||||||
Number of self-storage facilities owned and operated | facility | 1 | ||||||||
Ownership interest held by the entity (as a percent) | 90.00% | ||||||||
Total assets | $ 17,677 | ||||||||
Total liabilities | $ 11,530 | ||||||||
VIE | Shirlington Rd LLC | |||||||||
Interests in Consolidated Real Estate Joint Ventures | |||||||||
Number of self-storage facilities owned and operated | facility | 1 | ||||||||
Ownership interest held by the entity (as a percent) | 90.00% | ||||||||
Total assets | $ 16,470 | ||||||||
Total liabilities | 13,009 | ||||||||
USIFB, LLP | |||||||||
Interests in Consolidated Real Estate Joint Ventures | |||||||||
Number of self-storage facilities owned and operated | property | 2 | ||||||||
Ownership interest held by the entity (as a percent) | 97.00% | ||||||||
Carrying amount of mortgage loans | £ 4.1 | $ 6,800 | |||||||
Gain (loss) from sale of land | $ 3,000 | ||||||||
Number of assets sold | facility | 1 | ||||||||
Proceeds from sales of facilities, net | $ 7,000 | ||||||||
Gain from sale of real estate | 3,000 | ||||||||
Foreign currency translation loss | $ (1,200) | ||||||||
Aggregate sale price | £ 6.5 | $ 9,900 | |||||||
SRLLC | |||||||||
Interests in Consolidated Real Estate Joint Ventures | |||||||||
Carrying amount of mortgage loans | 13,100 | ||||||||
Amount of mortgage loan commitment | 14,600 | ||||||||
SNL | |||||||||
Interests in Consolidated Real Estate Joint Ventures | |||||||||
Carrying amount of mortgage loans | 9,100 | ||||||||
Amount of mortgage loan commitment | 9,800 | ||||||||
SNL II | |||||||||
Interests in Consolidated Real Estate Joint Ventures | |||||||||
Carrying amount of mortgage loans | 11,300 | ||||||||
Amount of mortgage loan commitment | $ 12,800 |
NONCONTROLLING INTERESTS - Oper
NONCONTROLLING INTERESTS - Operating Partnership Ownership (Details) - USD ($) $ in Thousands | Apr. 18, 2016 | May 14, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 |
Operating Partnership Ownership | |||||
OP Units outstanding which are not owned by the general partner (as a percent) | 1.20% | 1.20% | |||
OP units issued (in shares) | 61,224 | 20,408 | |||
Issuance of OP Units | $ 1,500 | $ 500 | |||
Increase to OP units owned by third parties and a corresponding decrease to capital | $ 1,469 | $ 2,913 | |||
CubeSmart, L.P. and Subsidiaries | |||||
Operating Partnership Ownership | |||||
OP units outstanding (in shares) | 2,220,874 | 2,159,650 | |||
Number of trading days used to determine average of the closing prices of the common shares | 10 days | ||||
Increase to OP units owned by third parties and a corresponding decrease to capital | $ 1,469 | $ 2,913 | $ 19,600 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - Joint ventures related to affiliated real estate investments $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2016USD ($)facility | Jun. 30, 2015USD ($) | Dec. 31, 2015USD ($) | |
RELATED PARTY TRANSACTIONS | |||||
Management fees | $ 0.7 | $ 0.2 | $ 1.2 | $ 0.5 | |
Amounts due to the Company from related parties | 3 | 3 | $ 1.9 | ||
Mortgage loans receivable from consolidated joint ventures | 33.3 | $ 33.3 | $ 29.6 | ||
HVP | |||||
RELATED PARTY TRANSACTIONS | |||||
Acquisition fee (as a percent) | 0.50% | ||||
Acquisition fees | $ 1.2 | $ 1.8 | |||
Number of Real Estate Properties Acquired | facility | 67 | ||||
Minimum | |||||
RELATED PARTY TRANSACTIONS | |||||
Management fee (as a percent) | 5.00% | ||||
Maximum | |||||
RELATED PARTY TRANSACTIONS | |||||
Management fee (as a percent) | 6.00% |
PRO FORMA FINANCIAL INFORMATI48
PRO FORMA FINANCIAL INFORMATION (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2016$ / shares | Jun. 30, 2015$ / shares | Jun. 30, 2016USD ($)property$ / shares | Jun. 30, 2015USD ($)$ / shares | Dec. 31, 2015USD ($)property | |
Consolidated results of operations on a pro forma basis | |||||
Pro forma revenue | $ | $ 248,053 | $ 231,140 | |||
Pro forma income | $ | $ 52,253 | $ 29,276 | |||
Earnings per share from continuing operations: | |||||
Basic - as reported (in dollars per share) | $ 0.11 | $ 0.07 | $ 0.19 | $ 0.12 | |
Diluted - as reported (in dollars per share) | $ 0.11 | $ 0.07 | 0.19 | 0.11 | |
Basic - as pro forma (in dollars per share) | 0.28 | 0.16 | |||
Diluted - as pro forma (in dollars per share) | $ 0.28 | $ 0.16 | |||
Self-storage facilities | |||||
Self-storage facilities | |||||
Number of self-storage facilities acquired | property | 17 | 29 | |||
Aggregate purchase price | $ | $ 270,900 | $ 292,400 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) $ in Millions | Jun. 15, 2016facility | Apr. 21, 2016facility | Mar. 30, 2016facility | Jan. 26, 2016facility | Dec. 08, 2015facility | Jul. 29, 2016USD ($)facility |
HVP | ||||||
Subsequent Events | ||||||
Number of self-storage facilities acquired | 1 | 5 | 30 | 1 | 30 | |
Subsequent event | Nevada | ||||||
Subsequent Events | ||||||
Number of self-storage facilities acquired | 2 | |||||
Purchase price of acquisition | $ | $ 23.2 |
CONSOLIDATED BALANCE SHEETS (LP
CONSOLIDATED BALANCE SHEETS (LP cube) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
ASSETS | ||
Storage facilities | $ 3,861,096 | $ 3,467,032 |
Less: Accumulated depreciation | (652,657) | (594,049) |
Storage facilities, net (including VIE assets of $203,341 and $136,274, respectively) | 3,208,439 | 2,872,983 |
Cash and cash equivalents | 3,423 | 62,869 |
Restricted cash | 9,017 | 24,600 |
Loan procurement costs, net of amortization | 2,475 | 2,800 |
Investment in real estate venture, at equity | 99,915 | 97,281 |
Other assets, net | 39,240 | 43,631 |
Total assets | 3,362,509 | 3,104,164 |
LIABILITIES AND CAPITAL | ||
Unsecured senior notes, net | 742,402 | 741,904 |
Revolving credit facility | 150,000 | |
Unsecured term loan | 398,466 | 398,183 |
Mortgage loans and notes payable, net | 138,716 | 111,455 |
Accounts payable, accrued expenses and other liabilities | 96,795 | 85,034 |
Distributions payable | 39,449 | 38,685 |
Deferred revenue | 19,868 | 17,519 |
Security deposits | 402 | 403 |
Total liabilities | 1,586,098 | 1,393,183 |
Limited Partnership interests of third parties | 68,581 | 66,128 |
Commitments and contingencies | ||
Capital | ||
Accumulated other comprehensive loss | (4,623) | (4,978) |
Total liabilities and equity | 3,362,509 | 3,104,164 |
CubeSmart, L.P. and Subsidiaries | ||
ASSETS | ||
Storage facilities | 3,861,096 | 3,467,032 |
Less: Accumulated depreciation | (652,657) | (594,049) |
Storage facilities, net (including VIE assets of $203,341 and $136,274, respectively) | 3,208,439 | 2,872,983 |
Cash and cash equivalents | 3,423 | 62,869 |
Restricted cash | 9,017 | 24,600 |
Loan procurement costs, net of amortization | 2,475 | 2,800 |
Investment in real estate venture, at equity | 99,915 | 97,281 |
Other assets, net | 39,240 | 43,631 |
Total assets | 3,362,509 | 3,104,164 |
LIABILITIES AND CAPITAL | ||
Unsecured senior notes, net | 742,402 | 741,904 |
Revolving credit facility | 150,000 | |
Unsecured term loan | 398,466 | 398,183 |
Mortgage loans and notes payable, net | 138,716 | 111,455 |
Accounts payable, accrued expenses and other liabilities | 96,795 | 85,034 |
Distributions payable | 39,449 | 38,685 |
Deferred revenue | 19,868 | 17,519 |
Security deposits | 402 | 403 |
Total liabilities | 1,586,098 | 1,393,183 |
Limited Partnership interests of third parties | 68,581 | 66,128 |
Capital | ||
Operating Partner | 1,706,866 | 1,648,305 |
Accumulated other comprehensive loss | (4,623) | (4,978) |
Total CubeSmart, L.P. capital | 1,702,243 | 1,643,327 |
Noncontrolling interests in subsidiaries | 5,587 | 1,526 |
Total capital | 1,707,830 | 1,644,853 |
Total liabilities and equity | $ 3,362,509 | $ 3,104,164 |
CONSOLIDATED BALANCE SHEETS (51
CONSOLIDATED BALANCE SHEETS (Parenthetical) (LP cube) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Storage facilities, net | $ 3,208,439 | $ 2,872,983 |
VIE | ||
Storage facilities, net | 203,341 | 136,274 |
CubeSmart, L.P. and Subsidiaries | ||
Storage facilities, net | 3,208,439 | 2,872,983 |
CubeSmart, L.P. and Subsidiaries | VIE | ||
Storage facilities, net | $ 203,341 | $ 136,274 |
CONSOLIDATED STATEMENTS OF OP52
CONSOLIDATED STATEMENTS OF OPERATIONS (LP cube) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
REVENUES | ||||
Rental income | $ 111,538 | $ 96,803 | $ 216,535 | $ 188,359 |
Other property related income | 12,643 | 11,385 | 24,406 | 21,928 |
Property management fee income | 2,345 | 1,683 | 4,456 | 3,272 |
Total revenues | 126,526 | 109,871 | 245,397 | 213,559 |
OPERATING EXPENSES | ||||
Property operating expenses | 41,607 | 38,210 | 81,826 | 75,641 |
Depreciation and amortization | 41,448 | 38,086 | 80,804 | 75,981 |
General and administrative | 7,891 | 7,114 | 16,119 | 14,287 |
Acquisition related costs | 2,563 | 753 | 4,905 | 1,263 |
Total operating expenses | 93,509 | 84,163 | 183,654 | 167,172 |
OPERATING INCOME | 33,017 | 25,708 | 61,743 | 46,387 |
Interest: | ||||
Interest expense on loans | (12,200) | (10,868) | (24,284) | (21,925) |
Loan procurement amortization expense | (611) | (659) | (1,216) | (1,205) |
Equity in losses of real estate ventures | (724) | (100) | (1,236) | (338) |
Other | 901 | (208) | 1,231 | (524) |
Total other expense | (12,634) | (11,835) | (25,505) | (23,992) |
NET INCOME | 20,383 | 13,873 | 36,238 | 22,395 |
NET (INCOME) LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS | ||||
Noncontrolling interest in subsidiaries | 268 | 12 | 335 | 15 |
Operating Partnership interests of third parties | (227) | (161) | (399) | (252) |
Distribution to preferred unitholders | (1,502) | (1,502) | (3,004) | (3,004) |
NET INCOME ATTRIBUTABLE TO THE COMPANY'S COMMON SHAREHOLDERS | $ 18,922 | $ 12,222 | $ 33,170 | $ 19,154 |
Diluted - as reported (in dollars per share) | $ 0.11 | $ 0.07 | $ 0.19 | $ 0.11 |
Weighted-average basic units outstanding (in units) | 177,880 | 166,683 | 176,838 | 166,096 |
Weighted-average diluted units outstanding (in units) | 179,221 | 168,224 | 178,172 | 167,655 |
AMOUNTS ATTRIBUTABLE TO COMMON UNITHOLDERS: | ||||
Net income | $ 18,922 | $ 12,222 | $ 33,170 | $ 19,154 |
CubeSmart, L.P. and Subsidiaries | ||||
REVENUES | ||||
Rental income | 111,538 | 96,803 | 216,535 | 188,359 |
Other property related income | 12,643 | 11,385 | 24,406 | 21,928 |
Property management fee income | 2,345 | 1,683 | 4,456 | 3,272 |
Total revenues | 126,526 | 109,871 | 245,397 | 213,559 |
OPERATING EXPENSES | ||||
Property operating expenses | 41,607 | 38,210 | 81,826 | 75,641 |
Depreciation and amortization | 41,448 | 38,086 | 80,804 | 75,981 |
General and administrative | 7,891 | 7,114 | 16,119 | 14,287 |
Acquisition related costs | 2,563 | 753 | 4,905 | 1,263 |
Total operating expenses | 93,509 | 84,163 | 183,654 | 167,172 |
OPERATING INCOME | 33,017 | 25,708 | 61,743 | 46,387 |
Interest: | ||||
Interest expense on loans | (12,200) | (10,868) | (24,284) | (21,925) |
Loan procurement amortization expense | (611) | (659) | (1,216) | (1,205) |
Equity in losses of real estate ventures | (724) | (100) | (1,236) | (338) |
Other | 901 | (208) | 1,231 | (524) |
Total other expense | (12,634) | (11,835) | (25,505) | (23,992) |
NET INCOME | 20,383 | 13,873 | 36,238 | 22,395 |
NET (INCOME) LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS | ||||
Noncontrolling interest in subsidiaries | 268 | 12 | 335 | 15 |
NET INCOME (LOSS) ATTRIBUTABLE TO CUBESMART L.P. | 20,651 | 13,885 | 36,573 | 22,410 |
Operating Partnership interests of third parties | (227) | (161) | (399) | (252) |
NET INCOME ATTRIBUTABLE TO OPERATING PARTNER | 20,424 | 13,724 | 36,174 | 22,158 |
Distribution to preferred unitholders | (1,502) | (1,502) | (3,004) | (3,004) |
NET INCOME ATTRIBUTABLE TO THE COMPANY'S COMMON SHAREHOLDERS | $ 18,922 | $ 12,222 | $ 33,170 | $ 19,154 |
Basic earnings per unit attributable to common unitholders | $ 0.11 | $ 0.07 | $ 0.19 | $ 0.12 |
Diluted - as reported (in dollars per share) | $ 0.11 | $ 0.07 | $ 0.19 | $ 0.11 |
Weighted-average basic units outstanding (in units) | 177,880 | 166,683 | 176,838 | 166,096 |
Weighted-average diluted units outstanding (in units) | 179,221 | 168,224 | 178,172 | 167,655 |
AMOUNTS ATTRIBUTABLE TO COMMON UNITHOLDERS: | ||||
Net income | $ 18,922 | $ 12,222 | $ 33,170 | $ 19,154 |
CONSOLIDATED STATEMENTS OF CO53
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (LP cube) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
NET INCOME | $ 20,383 | $ 13,873 | $ 36,238 | $ 22,395 |
Other comprehensive (loss) income: | ||||
Unrealized losses on interest rate swaps | (581) | (357) | (2,235) | (2,686) |
Reclassification of realized losses on interest rate swaps | 1,268 | 1,572 | 2,594 | 3,137 |
Unrealized loss on foreign currency translation | 268 | (69) | ||
OTHER COMPREHENSIVE LOSS | 687 | 1,483 | 359 | 382 |
COMPREHENSIVE INCOME | 21,070 | 15,356 | 36,597 | 22,777 |
Comprehensive income attributable to Operating Partnership interests of third parties | (235) | (180) | (403) | (256) |
Comprehensive loss attributable to noncontrolling interest in subsidiaries | 268 | 5 | 335 | 18 |
COMPREHENSIVE INCOME ATTRIBUTABLE TO THE COMPANY | 21,103 | 15,181 | 36,529 | 22,539 |
CubeSmart, L.P. and Subsidiaries | ||||
NET INCOME | 20,383 | 13,873 | 36,238 | 22,395 |
Other comprehensive (loss) income: | ||||
Unrealized losses on interest rate swaps | (581) | (357) | (2,235) | (2,686) |
Reclassification of realized losses on interest rate swaps | 1,268 | 1,572 | 2,594 | 3,137 |
Unrealized loss on foreign currency translation | 268 | (69) | ||
OTHER COMPREHENSIVE LOSS | 687 | 1,483 | 359 | 382 |
COMPREHENSIVE INCOME | 21,070 | 15,356 | 36,597 | 22,777 |
Comprehensive income attributable to Operating Partnership interests of third parties | (235) | (180) | (403) | (256) |
Comprehensive loss attributable to noncontrolling interest in subsidiaries | 268 | 5 | 335 | 18 |
COMPREHENSIVE INCOME ATTRIBUTABLE TO THE COMPANY | $ 21,103 | $ 15,181 | $ 36,529 | $ 22,539 |
CONSOLIDATED STATEMENTS OF CAPI
CONSOLIDATED STATEMENTS OF CAPITAL (LP cube) - USD ($) shares in Thousands, $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Increase (Decrease) in Partners' Capital | |||
Balance of Noncontrolling Interests in the Operating Partnership | $ 66,128 | ||
Contributions from noncontrolling interests in subsidiaries | 4,396 | $ 178 | |
Adjustment for Operating Partnership interests of third parties | (1,469) | (2,913) | |
Net income (loss) | 35,839 | 22,143 | |
Other comprehensive income (loss), net | 355 | 378 | |
Balance of Noncontrolling Interests in the Operating Partnership | 68,581 | $ 66,128 | |
Noncontrolling Interests in Operating Partnership | |||
Increase (Decrease) in Partners' Capital | |||
Balance of Noncontrolling Interests in the Operating Partnership | 66,128 | 49,823 | 49,823 |
Issuance of OP Units | 1,500 | 500 | |
Adjustment for Operating Partnership interests of third parties | 1,469 | 2,913 | |
Net income (loss) | 399 | 252 | |
Other comprehensive income (loss), net | 4 | 4 | |
Balance of Noncontrolling Interests in the Operating Partnership | 68,581 | 52,472 | 66,128 |
CubeSmart, L.P. and Subsidiaries | |||
Increase (Decrease) in Partners' Capital | |||
Balance | 1,644,853 | 1,449,618 | 1,449,618 |
Balance of Noncontrolling Interests in the Operating Partnership | 66,128 | ||
Contributions from noncontrolling interests in subsidiaries | 4,396 | 178 | |
Issuance of common OP units | 88,602 | 56,477 | |
Issuance of restricted OP units | 1 | 1 | |
Conversion from units to shares | 296 | ||
Exercise of OP unit options | 12,199 | 9,359 | |
Amortization of restricted OP units | 171 | (36) | |
OP unit compensation expense | 623 | 491 | |
Adjustment for Operating Partnership interests of third parties | (1,469) | (2,913) | (19,600) |
Net income (loss) | 35,839 | 22,143 | |
Other comprehensive income (loss), net | 355 | 378 | |
Preferred OP unit distributions | (3,004) | (3,004) | |
Common OP unit distributions | (74,736) | (53,433) | |
Balance | 1,707,830 | 1,479,555 | 1,644,853 |
Balance of Noncontrolling Interests in the Operating Partnership | 68,581 | 66,128 | |
CubeSmart, L.P. and Subsidiaries | Noncontrolling Interests in Operating Partnership | |||
Increase (Decrease) in Partners' Capital | |||
Balance of Noncontrolling Interests in the Operating Partnership | 66,128 | 49,823 | 49,823 |
Issuance of OP Units | 1,500 | 500 | |
Conversion from units to shares | (296) | ||
Adjustment for Operating Partnership interests of third parties | 1,469 | 2,913 | |
Net income (loss) | 399 | 252 | |
Other comprehensive income (loss), net | 4 | 4 | |
Common OP unit distributions | (919) | (724) | |
Balance of Noncontrolling Interests in the Operating Partnership | 68,581 | 52,472 | 66,128 |
CubeSmart, L.P. and Subsidiaries | Total Shareholders' Equity | |||
Increase (Decrease) in Partners' Capital | |||
Balance | 1,643,327 | 1,448,026 | 1,448,026 |
Issuance of common OP units | 88,602 | 56,477 | |
Issuance of restricted OP units | 1 | 1 | |
Conversion from units to shares | 296 | ||
Exercise of OP unit options | 12,199 | 9,359 | |
Amortization of restricted OP units | 171 | (36) | |
OP unit compensation expense | 623 | 491 | |
Adjustment for Operating Partnership interests of third parties | (1,469) | (2,913) | |
Net income (loss) | 36,174 | 22,158 | |
Other comprehensive income (loss), net | 355 | 381 | |
Preferred OP unit distributions | (3,004) | (3,004) | |
Common OP unit distributions | (74,736) | (53,433) | |
Balance | 1,702,243 | 1,477,803 | 1,643,327 |
CubeSmart, L.P. and Subsidiaries | Operating Partner | |||
Increase (Decrease) in Partners' Capital | |||
Balance | $ 1,648,305 | $ 1,456,785 | $ 1,456,785 |
Balance (in units) | 174,668 | 163,957 | 163,957 |
Issuance of common OP units | $ 88,602 | $ 56,477 | |
Issuance of common OP units (in units) | 2,820 | 2,339 | |
Issuance of restricted OP units | $ 1 | $ 1 | |
Issuance of restricted OP units (in units) | 121 | 154 | |
Conversion from units to shares | $ 296 | ||
Conversion from units to shares (in units) | 12 | ||
Exercise of OP unit options | $ 12,199 | $ 9,359 | |
Exercise of OP unit options (in units) | 641 | 976 | |
Amortization of restricted OP units | $ 171 | $ (36) | |
OP unit compensation expense | 623 | 491 | |
Adjustment for Operating Partnership interests of third parties | (1,469) | (2,913) | |
Net income (loss) | 36,174 | 22,158 | |
Preferred OP unit distributions | (3,004) | (3,004) | |
Common OP unit distributions | (74,736) | (53,433) | |
Balance | $ 1,706,866 | $ 1,486,181 | $ 1,648,305 |
Balance (in units) | 178,250 | 167,438 | 174,668 |
CubeSmart, L.P. and Subsidiaries | Preferred Operating Partner | |||
Increase (Decrease) in Partners' Capital | |||
Balance (in units) | 3,100 | 3,100 | 3,100 |
Balance (in units) | 3,100 | 3,100 | 3,100 |
CubeSmart, L.P. and Subsidiaries | Accumulated Other Comprehensive (Loss) Income | |||
Increase (Decrease) in Partners' Capital | |||
Balance | $ (4,978) | $ (8,759) | $ (8,759) |
Other comprehensive income (loss), net | 355 | 381 | |
Balance | (4,623) | (8,378) | (4,978) |
CubeSmart, L.P. and Subsidiaries | Noncontrolling Interest in Subsidiaries | |||
Increase (Decrease) in Partners' Capital | |||
Balance | 1,526 | 1,592 | 1,592 |
Contributions from noncontrolling interests in subsidiaries | 4,396 | 178 | |
Net income (loss) | (335) | (15) | |
Other comprehensive income (loss), net | (3) | ||
Balance | $ 5,587 | $ 1,752 | $ 1,526 |
CONSOLIDATED STATEMENTS OF CA55
CONSOLIDATED STATEMENTS OF CASH FLOWS (LP cube) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Operating Activities | ||
Net income | $ 36,238 | $ 22,395 |
Adjustments to reconcile net income to cash provided by operating activities: | ||
Depreciation and amortization | 82,020 | 77,186 |
Equity in losses of real estate ventures | 1,236 | 338 |
Equity compensation expense | 794 | 455 |
Accretion of fair market value adjustment of debt | (504) | (803) |
Changes in other operating accounts: | ||
Restricted cash | 272 | 190 |
Other assets | (3,630) | (3,896) |
Accounts payable and accrued expenses | 5,891 | 3,306 |
Other liabilities | 1,660 | 1,517 |
Net cash provided by operating activities | 123,977 | 100,688 |
Investing Activities | ||
Acquisitions of storage facilities | (235,577) | (85,627) |
Additions and improvements to storage facilities | (13,261) | (11,874) |
Development costs | (94,496) | (37,026) |
Investment in real estate ventures | (7,586) | |
Cash distributed from real estate ventures | 3,716 | 3,000 |
Fundings of notes receivable | (4,100) | |
Change in restricted cash | 137 | (63) |
Net cash used in investing activities | (347,067) | (135,690) |
Proceeds from: | ||
Revolving credit facility | 655,100 | 378,700 |
Principal payments on: | ||
Revolving credit facility | (505,100) | (295,100) |
Mortgage loans and notes payable | (13,659) | (55,451) |
Loan procurement costs | (2,283) | |
Contributions from noncontrolling interests in subsidiaries | 4,396 | 178 |
Distributions paid to common OP unitholders | (73,984) | (52,887) |
Distributions paid to preferred OP unitholders | (3,004) | (3,004) |
Net cash provided by financing activities | 163,644 | 35,268 |
Change in cash and cash equivalents | (59,446) | 266 |
Cash and cash equivalents at beginning of period | 62,869 | 2,901 |
Cash and cash equivalents at end of period | 3,423 | 3,167 |
Supplemental Cash Flow and Noncash Information | ||
Cash paid for interest, net of interest capitalized | 26,879 | 23,893 |
Supplemental disclosure of noncash activities: | ||
Restricted cash - acquisition of storage facilities | (22,019) | |
Accretion Of Liability | 4,174 | 7,427 |
Derivative valuation adjustment | 359 | 451 |
Foreign currency translation adjustment | (69) | |
Mortgage loan assumptions | 41,513 | 2,695 |
CubeSmart, L.P. and Subsidiaries | ||
Operating Activities | ||
Net income | 36,238 | 22,395 |
Adjustments to reconcile net income to cash provided by operating activities: | ||
Depreciation and amortization | 82,020 | 77,186 |
Equity in losses of real estate ventures | 1,236 | 338 |
Equity compensation expense | 794 | 455 |
Accretion of fair market value adjustment of debt | (504) | (803) |
Changes in other operating accounts: | ||
Restricted cash | 272 | 190 |
Other assets | (3,630) | (3,896) |
Accounts payable and accrued expenses | 5,891 | 3,306 |
Other liabilities | 1,660 | 1,517 |
Net cash provided by operating activities | 123,977 | 100,688 |
Investing Activities | ||
Acquisitions of storage facilities | (235,577) | (85,627) |
Additions and improvements to storage facilities | (13,261) | (11,874) |
Development costs | (94,496) | (37,026) |
Investment in real estate ventures | (7,586) | |
Cash distributed from real estate ventures | 3,716 | 3,000 |
Fundings of notes receivable | (4,100) | |
Change in restricted cash | 137 | (63) |
Net cash used in investing activities | (347,067) | (135,690) |
Proceeds from: | ||
Revolving credit facility | 655,100 | 378,700 |
Principal payments on: | ||
Revolving credit facility | (505,100) | (295,100) |
Mortgage loans and notes payable | (13,659) | (55,451) |
Loan procurement costs | (2,283) | |
Proceeds from issuance of common OP units | 88,603 | 56,478 |
Exercise of OP unit options | 12,199 | 9,359 |
Contributions from noncontrolling interests in subsidiaries | 4,396 | 178 |
Distributions paid to common OP unitholders | (74,891) | (53,609) |
Distributions paid to preferred OP unitholders | (3,004) | (3,004) |
Net cash provided by financing activities | 163,644 | 35,268 |
Change in cash and cash equivalents | (59,446) | 266 |
Cash and cash equivalents at beginning of period | 62,869 | 2,901 |
Cash and cash equivalents at end of period | 3,423 | 3,167 |
Supplemental Cash Flow and Noncash Information | ||
Cash paid for interest, net of interest capitalized | 26,879 | 23,893 |
Supplemental disclosure of noncash activities: | ||
Restricted cash - acquisition of storage facilities | (22,019) | |
Accretion Of Liability | 4,174 | 7,427 |
Derivative valuation adjustment | 359 | 451 |
Foreign currency translation adjustment | (69) | |
Mortgage loan assumptions | $ 41,513 | $ 2,695 |