Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | Apr. 24, 2019 | |
Document and Entity Information | ||
Entity Registrant Name | CubeSmart | |
Entity Central Index Key | 0001298675 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 188,471,117 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
ASSETS | ||
Storage properties | $ 4,489,732 | $ 4,463,455 |
Less: Accumulated depreciation | (884,941) | (862,487) |
Storage properties, net (including VIE assets of $248,805 and $330,986, respectively) | 3,604,791 | 3,600,968 |
Cash and cash equivalents | 3,533 | 3,764 |
Restricted cash | 3,008 | 2,718 |
Loan procurement costs, net of amortization | 793 | 963 |
Investment in real estate venture, at equity | 94,092 | 95,796 |
Other assets, net | 107,972 | 48,763 |
Total assets | 3,814,189 | 3,752,972 |
LIABILITIES AND EQUITY | ||
Unsecured senior notes, net | 1,488,692 | 1,143,524 |
Revolving credit facility | 96,145 | 195,525 |
Unsecured term loans, net | 99,861 | 299,799 |
Mortgage loans and notes payable, net | 107,414 | 108,246 |
Accounts payable, accrued expenses and other liabilities | 168,174 | 149,914 |
Distributions payable | 60,978 | 60,627 |
Deferred revenue | 23,485 | 22,595 |
Security deposits | 466 | 474 |
Total liabilities | 2,045,215 | 1,980,704 |
Noncontrolling interests in the Operating Partnership | 60,414 | 55,819 |
Commitments and contingencies | ||
Equity | ||
Common shares $.01 par value, 400,000,000 shares authorized, 188,137,137 and 187,145,103 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively | 1,881 | 1,871 |
Additional paid in capital | 2,519,750 | 2,500,751 |
Accumulated other comprehensive loss | (789) | (1,029) |
Accumulated deficit | (823,473) | (791,915) |
Total CubeSmart shareholders' equity | 1,697,369 | 1,709,678 |
Noncontrolling interests in subsidiaries | 11,191 | 6,771 |
Total equity | 1,708,560 | 1,716,449 |
Total liabilities and equity | $ 3,814,189 | $ 3,752,972 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Storage properties | $ 3,604,791 | $ 3,600,968 |
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 | 188,137,137 | 187,145,103 |
Common shares, shares outstanding | 188,137,137 | 187,145,103 |
VIE | ||
Storage properties | $ 248,805 | $ 330,986 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
REVENUES | ||
Rental income | $ 131,592 | $ 124,161 |
Total revenues | 152,845 | 142,877 |
OPERATING EXPENSES | ||
Property operating expenses | 51,425 | 48,754 |
Depreciation and amortization | 38,442 | 34,966 |
General and administrative | 9,147 | 8,744 |
Total operating expenses | 99,014 | 92,464 |
Interest: | ||
Interest expense on loans | (17,517) | (15,155) |
Loan procurement amortization expense | (624) | (579) |
Equity in earnings (losses) of real estate ventures | 261 | (184) |
Other | (165) | 304 |
Total other expense | (18,045) | (15,614) |
NET INCOME | 35,786 | 34,799 |
NET (INCOME) LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS | ||
Noncontrolling interests in the Operating Partnership | (358) | (383) |
Noncontrolling interest in subsidiaries | 70 | 7 |
NET INCOME ATTRIBUTABLE TO THE COMPANY'S COMMON SHAREHOLDERS | $ 35,498 | $ 34,423 |
Basic earnings per share attributable to common shareholders (in dollars per share) | $ 0.19 | $ 0.19 |
Diluted earnings per share attributable to common shareholders (in dollars per share) | $ 0.19 | $ 0.19 |
Weighted-average basic shares outstanding (in shares) | 187,253 | 182,274 |
Weighted-average diluted shares outstanding (in shares) | 187,984 | 183,222 |
Other Property Related Income | ||
REVENUES | ||
Property related income | $ 15,675 | $ 14,247 |
Property Management Fee Income | ||
REVENUES | ||
Property related income | $ 5,578 | $ 4,469 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||
NET INCOME | $ 35,786 | $ 34,799 |
Other comprehensive income: | ||
Unrealized gains on interest rate swaps | 232 | 60 |
Reclassification of realized losses on interest rate swaps | 10 | 219 |
OTHER COMPREHENSIVE INCOME | 242 | 279 |
COMPREHENSIVE INCOME | 36,028 | 35,078 |
Comprehensive income attributable to noncontrolling interests in the Operating Partnership | (360) | (383) |
Comprehensive loss attributable to noncontrolling interests in subsidiaries | 70 | 7 |
COMPREHENSIVE INCOME ATTRIBUTABLE TO THE COMPANY | $ 35,738 | $ 34,702 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) shares in Thousands, $ in Thousands | Total Shareholders' Equity | Common 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, 2017 | $ 1,629,134 | $ 1,822 | $ 2,356,620 | $ 3 | $ (729,311) | $ 6,236 | $ 1,635,370 | |
Balance (in shares) at Dec. 31, 2017 | 182,216 | |||||||
Balance of Noncontrolling Interests in the Operating Partnership at Dec. 31, 2017 | $ 54,320 | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Contributions from noncontrolling interests in subsidiaries | 738 | 738 | ||||||
Issuance of common shares | (44) | (44) | (44) | |||||
Issuance of restricted shares | 1 | $ 1 | 1 | |||||
Issuance of restricted shares (in shares) | 64 | |||||||
Issuance of OP units | 4,782 | |||||||
Exercise of stock options | 2 | 2 | 2 | |||||
Amortization of restricted shares | (242) | (242) | (242) | |||||
Share compensation expense | 423 | 423 | 423 | |||||
Adjustment for noncontrolling interest in the Operating Partnership | 1,169 | 1,169 | (1,169) | 1,169 | ||||
Net income (loss) | 34,423 | 34,423 | (7) | 34,416 | ||||
Net income (loss) | 383 | |||||||
Other comprehensive income, net | 276 | 276 | 276 | |||||
Other comprehensive income, net | 3 | |||||||
Common share distributions | (54,780) | (54,780) | (614) | (54,780) | ||||
Balance at Mar. 31, 2018 | 1,610,362 | $ 1,823 | 2,356,759 | 279 | (748,499) | 6,967 | 1,617,329 | |
Balance (in shares) at Mar. 31, 2018 | 182,280 | |||||||
Balance of Noncontrolling Interests in the Operating Partnership at Mar. 31, 2018 | 57,705 | |||||||
Balance at Dec. 31, 2017 | 1,629,134 | $ 1,822 | 2,356,620 | 3 | (729,311) | 6,236 | 1,635,370 | |
Balance (in shares) at Dec. 31, 2017 | 182,216 | |||||||
Balance of Noncontrolling Interests in the Operating Partnership at Dec. 31, 2017 | 54,320 | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Acquisition of noncontrolling interest in subsidiary | (300) | |||||||
Balance at Dec. 31, 2018 | 1,709,678 | $ 1,871 | 2,500,751 | (1,029) | (791,915) | 6,771 | 1,716,449 | |
Balance (in shares) at Dec. 31, 2018 | 187,145 | |||||||
Balance of Noncontrolling Interests in the Operating Partnership at Dec. 31, 2018 | 55,819 | 55,819 | ||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Contributions from noncontrolling interests in subsidiaries | 4,828 | 4,828 | ||||||
Distributions to noncontrolling interests in subsidiaries | (66) | (66) | ||||||
Acquisition of noncontrolling interest in subsidiary | (9,728) | (9,728) | (272) | (10,000) | ||||
Issuance of common shares | 24,580 | $ 8 | 24,572 | 24,580 | ||||
Issuance of common shares (in shares) | 773 | |||||||
Issuance of restricted shares (in shares) | 19 | |||||||
Conversion from units to shares | 1,842 | $ 1 | 1,841 | (1,842) | 1,842 | |||
Conversion from units to shares (in shares) | 60 | |||||||
Exercise of stock options | 1,049 | $ 1 | 1,048 | 1,049 | ||||
Exercise of stock options (in shares) | 140 | |||||||
Amortization of restricted shares | 798 | 798 | 798 | |||||
Share compensation expense | 468 | 468 | 468 | |||||
Adjustment for noncontrolling interest in the Operating Partnership | (6,681) | (6,681) | 6,681 | (6,681) | ||||
Net income (loss) | 35,498 | 35,498 | (70) | 35,428 | ||||
Net income (loss) | 358 | |||||||
Other comprehensive income, net | 240 | 240 | 240 | |||||
Other comprehensive income, net | 2 | |||||||
Common share distributions | (60,375) | (60,375) | (604) | (60,375) | ||||
Balance at Mar. 31, 2019 | $ 1,697,369 | $ 1,881 | $ 2,519,750 | $ (789) | $ (823,473) | $ 11,191 | 1,708,560 | |
Balance (in shares) at Mar. 31, 2019 | 188,137 | |||||||
Balance of Noncontrolling Interests in the Operating Partnership at Mar. 31, 2019 | $ 60,414 | $ 60,414 |
CONSOLIDATED STATEMENTS OF EQ_2
CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
CONSOLIDATED STATEMENTS OF EQUITY | ||
Common share distributions (in dollars per share) | $ 0.32 | $ 0.30 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Operating Activities | ||
Net income | $ 35,786 | $ 34,799 |
Adjustments to reconcile net income to cash provided by operating activities: | ||
Depreciation and amortization | 39,066 | 35,545 |
Equity in (earnings) losses of real estate ventures | (261) | 184 |
Equity compensation expense | 1,619 | 1,592 |
Accretion of fair market value adjustment of debt | (179) | (183) |
Changes in other operating accounts: | ||
Other assets | (3,212) | (1,352) |
Accounts payable and accrued expenses | 1,806 | (5,558) |
Other liabilities | 833 | 1,105 |
Net cash provided by operating activities | 75,458 | 66,132 |
Investing Activities | ||
Acquisitions of storage facilities | (25,097) | (4,034) |
Additions and improvements to storage facilities | (6,153) | (5,394) |
Development costs | (49,748) | (39,663) |
Investment in real estate ventures | (107) | (10,320) |
Cash distributed from real estate ventures | 2,072 | 2,257 |
Net cash used in investing activities | (79,033) | (57,154) |
Proceeds from: | ||
Unsecured senior notes | 347,746 | |
Revolving credit facility | 279,020 | 156,700 |
Principal payments on: | ||
Revolving credit facility | (378,400) | (102,000) |
Unsecured term loans | (200,000) | |
Mortgage loans and notes payable | (701) | (7,831) |
Loan procurement costs | (2,634) | |
Settlement of hedge transactions | (807) | |
Acquisition of noncontrolling interest in subsidiary | (5,172) | |
Proceeds from issuance of common shares, net | 24,580 | (43) |
Cash paid upon vesting of restricted shares | (353) | (1,411) |
Exercise of stock options | 1,049 | 2 |
Contributions from noncontrolling interests in subsidiaries | 738 | |
Distributions paid to noncontrolling interests in subsidiaries | (66) | |
Distributions paid to common shareholders | (60,005) | (54,746) |
Distributions paid to noncontrolling interests in Operating Partnership | (623) | (563) |
Net cash provided by (used in) financing activities | 3,634 | (9,154) |
Change in cash, cash equivalents, and restricted cash | 59 | (176) |
Cash, cash equivalents, and restricted cash at beginning of period | 6,482 | 9,158 |
Cash, cash equivalents, and restricted cash at end of period | 6,541 | 8,982 |
Supplemental Cash Flow and Noncash Information | ||
Cash paid for interest, net of interest capitalized | 15,918 | 15,298 |
Supplemental disclosure of noncash activities: | ||
Accretion of liability | 4,070 | 7,266 |
Derivative valuation adjustment | 242 | 279 |
Discount on issuance of unsecured senior notes | 2,254 | |
Mortgage loan assumptions | 7,166 | |
Issuance of OP units | $ 4,782 | |
Acquisition of noncontrolling interest in subsidiary | (4,828) | |
Contributions from noncontrolling interests in subsidiaries | $ 4,828 |
ORGANIZATION AND NATURE OF OPER
ORGANIZATION AND NATURE OF OPERATIONS | 3 Months Ended |
Mar. 31, 2019 | |
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 March 31, 2019, the Company owned self-storage properties located in 23 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 properties. As of March 31, 2019, the Parent Company owned approximately 99.0% 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 properties 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 following a specified restricted period 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 | 3 Months Ended |
Mar. 31, 2019 | |
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, 2018, 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, 2018. The results of operations for the three months ended March 31, 2019 and 2018 are not necessarily indicative of the results of operations to be expected for any future period or the full year. The Operating Partnership 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. Recent Accounting Pronouncements In August 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2017-12 – Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. The purpose of this updated guidance is to better align a company’s financial reporting for hedging activities with the economic objectives of those activities. The standard became effective on January 1, 2019. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements . 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 determines 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 are accounted for similar to previous guidance for operating leases. The new standard requires lessors to account for leases using an approach that is substantially equivalent to previous guidance for sales-type leases, direct financing leases and operating leases. The Company adopted the standard on January 1, 2019, the date it became effective for public companies, using the modified retrospective approach whereby the cumulative effect of adoption was recognized on the adoption date and prior periods were not restated. There was no net cumulative effect adjustment to retained earnings as of January 1, 2019 as a result of this adoption. Upon adoption, the Company elected the package of practical expedients permitted within the standard, which among other things, allows for the carryforward of historical lease classification. The Company also elected the practical expedient provided to lessors in a subsequent amendment to the standard that removed the requirement to separate lease and nonlease components, provided certain conditions were met. Refer to note 13 for the impact of the adoption of ASU No. 2016-02 – Leases (Topic 842) on the Company’s consolidated financial statements. |
STORAGE PROPERTIES
STORAGE PROPERTIES | 3 Months Ended |
Mar. 31, 2019 | |
STORAGE PROPERTIES | |
STORAGE FACILITIES | 3. STORAGE PROPERTIES The book value of the Company’s real estate assets is summarized as follows: March 31, December 31, 2019 2018 (in thousands) Land $ 809,403 $ 806,916 Buildings and improvements 3,364,592 3,343,173 Equipment 167,140 176,583 Construction in progress 148,597 136,783 Storage properties 4,489,732 4,463,455 Less: Accumulated depreciation (884,941) (862,487) Storage properties, net $ 3,604,791 $ 3,600,968 The following table summarizes the Company’s acquisition and disposition activity during the period beginning on January 1, 2018 through March 31, 2019: Number of Purchase / Sale Price Asset/Portfolio Market Transaction Date Stores (in thousands) 2019 Acquisitions: Maryland Asset Baltimore / DC March 2019 1 $ 22,000 1 $ 2018 Acquisitions: Texas Asset Texas Markets - Major January 2018 1 $ 12,200 Texas Asset Texas Markets - Major May 2018 1 19,000 Metro DC Asset Baltimore / DC July 2018 1 34,200 Nevada Asset Las Vegas September 2018 1 14,350 North Carolina Asset Charlotte September 2018 1 11,000 California Asset Los Angeles October 2018 1 53,250 Texas Asset Texas Markets - Major October 2018 1 23,150 California Asset San Diego November 2018 1 19,118 New York Asset New York / Northern NJ November 2018 1 37,000 Illinois Asset Chicago December 2018 1 4,250 10 $ 2018 Dispositions: Arizona Assets Phoenix November 2018 2 $ 17,502 2 $ |
INVESTMENT ACTIVITY
INVESTMENT ACTIVITY | 3 Months Ended |
Mar. 31, 2019 | |
INVESTMENT ACTIVITY | |
INVESTMENT ACTIVITY | 4. INVESTMENT ACTIVITY 2019 Acquisitions During the three months ended March 31, 2019, the Company acquired one store located in Maryland for $22.0 million. In connection with the acquisition, the Company allocated the purchase price and acquisition related costs to the tangible and intangible assets acquired based on fair value. Intangible assets consist of in-place leases, which aggregated to $0.8 million at the time of the acquisition and prior to amortization of such amounts. The estimated life of these in-place leases was 12 months and the amortization expense that was recognized during the three months ended March 31, 2019 was approximately $0.1 million. The following table summarizes the Company’s revenue and earnings associated with the 2019 acquisition, from the acquisition date, that are included in the consolidated statements of operations for the three months ended March 31, 2019: Three Months Ended March 31, 2019 (in thousands) Total revenue $ 78 Net loss (74) As of March 31, 2019, the Company had made aggregate deposits of $2.7 million associated with three stores that were under contract to be acquired for an aggregate acquisition price of $67.5 million. The deposits are reflected in Other assets, net on the Company’s consolidated balance sheets. 2018 Acquisitions During the year ended December 31, 2018, the Company acquired ten stores located throughout the United States, including one store upon completion of construction and the issuance of a certificate of occupancy, for an aggregate purchase price of approximately $227.5 million. In connection with these acquisitions, the Company allocated the purchase price and acquisition related costs to the tangible and intangible assets acquired based on fair value. Intangible assets consist of in-place leases, which aggregated $11.3 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 three months ended March 31, 2019 and 2018 was approximately $2.7 million and $0.1 million, respectively. In connection with one of the acquired stores, the Company assumed a $7.2 million mortgage loan that was immediately repaid by the Company. The remainder of the purchase price was funded with $0.2 million of cash and $4.8 million through the issuance of 168,011 OP Units (see note 12). The holder may tender the OP units for redemption by the Operating Partnership for a cash amount per OP Unit equal to the market value of an equivalent number of common shares of the Company. The Company has the right, but not the obligation, to assume and satisfy the redemption obligation of the Operating Partnership by issuing one common share in exchange for each OP Unit tendered for redemption. 2018 Dispositions On November 28, 2018, the Company sold two stores in Arizona for an aggregate sales price of approximately $17.5 million. In connection with these sales, the Company recorded gains that totaled approximately $10.6 million. Development As of March 31, 2019, the Company had invested in joint ventures to develop seven self-storage properties located in Massachusetts (2), New Jersey (1), New York (3) and Virginia (1). Construction for all projects is expected to be completed by the first quarter of 2021 (see note 12). As of March 31, 2019, development costs incurred to date for these projects totaled $136.4 million. Total construction costs for these projects are expected to be $188.6 million. These costs are capitalized to construction in progress while the projects are under development and are reflected in Storage properties on the Company’s consolidated balance sheets. During the third quarter of 2018, the Company, through a joint venture in which it owned a 51% interest, completed the construction and opened for operation, a self-storage property located in the Bronx, NY. Total construction costs for this project were $92.1 million. These costs are capitalized to land, building and improvements as well as equipment and are reflected in Storage properties on the Company’s consolidated balance sheets. On February 15, 2019, the noncontrolling member in the venture put its 49% interest in the venture to the Company for $37.8 million, which is included in Development costs in the consolidated statements of cash flows. |
INVESTMENT IN UNCONSOLIDATED RE
INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURES | 3 Months Ended |
Mar. 31, 2019 | |
INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURES | |
INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURES | 5. INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURES Capital Storage Partners, LLC (“Capital Storage”) On September 5, 2018, the Company invested $5.0 million in exchange for 100% of the Class A Preferred Units of Capital Storage Partners, LLC, a newly formed venture that acquired 22 self-storage properties located in Florida (4), Oklahoma (5), and Texas (13). The Class A Preferred Units earn an 11% cumulative dividend prior to any other distributions. The Company’s investment in Capital Storage and the related dividends are included in Other assets, net on the Company’s consolidated balance sheets and in Other income on the Company’s consolidated statements of operations, respectively. 191 IV CUBE LLC (“HVP IV”) On October 16, 2017, the Company acquired a self-storage property located in Texas for $9.4 million, which it then contributed to a newly-formed real estate venture on November 1, 2017. In return for contributing the property to HVP IV, the Company received approximately $7.5 million in cash and a 20% ownership interest in the venture. Since then, HVP IV has acquired 12 additional stores located in Arizona (2), Connecticut (2), Florida (3), Georgia (2), Maryland (1), and Texas (2) for an aggregate purchase price of $129.4 million, of which $4.7 million was allocated to the value of the in-place lease intangible. The Company has contributed $14.1 million in connection with the HVP IV acquisitions. On May 16, 2018 and August 15, 2018, HVP IV received $43.7 million and $24.4 million advances, respectively, on its $107.0 million loan facility, which encumbers the first 11 stores that were acquired by the venture. The loan bears interest at LIBOR plus 1.70% and matures on May 16, 2021 with options to extend the maturity date through May 16, 2023, subject to satisfaction of certain conditions and payment of the extension fees as stipulated in the loan agreement. As of March 31, 2019, HVP IV was under contract, and had made aggregate deposits of $0.8 million, to acquire six stores located in Florida (1) and Texas (5) for an aggregate purchase price of $100.7 million. CUBE HHF Northeast Venture LLC (“HHFNE”) On December 15, 2016, the Company invested a 10% ownership interest in a newly-formed real estate venture that acquired 13 self-storage properties located in Connecticut (3), Massachusetts (6), Rhode Island (2), and Vermont (2). HHFNE paid $87.5 million for these stores, of which $6.0 million was allocated to the value of the in-place lease intangible. The acquisition was funded primarily through an advance totaling $44.5 million on the venture’s 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 HHFNE related to this portfolio acquisition was $3.8 million. The loan bears interest at LIBOR plus 1.90% and matures on December 15, 2019 with options to extend the maturity date through December 15, 2021, subject to satisfaction of certain conditions and payment of the extension fees as stipulated in the loan agreement. 191 III CUBE LLC (“HVP III”) During the fourth quarter of 2015, the Company invested a 10% ownership interest in a newly-formed real estate venture that agreed to acquire a property portfolio comprised of 37 self-storage properties located in Michigan (17), Tennessee (10), Massachusetts (7), and Florida (3). HVP III paid $242.5 million for these 37 stores, of which $18.9 million was allocated to the value of the in-place lease intangible. HVP III acquired 30 of the stores on December 8, 2015 for $193.7 million, one of the stores on January 26, 2016 for $5.7 million, five of the stores on April 21, 2016 for $36.1 million, and one store on June 15, 2016 for $7.0 million. In connection with six of the acquired stores, HVP III 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 III related to this portfolio acquisition was $10.7 million. During the first quarter of 2016, HVP III agreed to acquire a property portfolio comprised of 31 self-storage properties located in South Carolina (22), Georgia (5), and North Carolina (4) that were previously managed by the Company. HVP III paid $115.5 million for these 31 stores, of which $10.6 million was allocated to the value of the in-place lease intangible. HVP III acquired 30 of the stores on March 30, 2016 for $112.8 million and one of the stores on November 2, 2016 for $2.7 million. In conjunction with the acquisitions, HVP III refinanced its existing loan facility by entering into an increased amended and restated loan facility not to exceed $185.5 million. The acquisitions were funded primarily through advances totaling $63.5 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 III related to this portfolio acquisition was $5.4 million, bringing its total investment in HVP III to $16.1 million as of September 30, 2017. The amended and restated loan facility bears interest at LIBOR plus 2.00% per annum. The maturity date of the restated loan facility was extended to June 30, 2019. CUBE HHF Limited Partnership (“HHF”) On December 10, 2013, the Company invested a 50% ownership interest in a newly-formed real estate venture that acquired 35 self-storage properties located in Texas (34) and North Carolina (1). HHF paid $315.7 million for these stores, of which $12.1 million was allocated to the value of the in-place lease intangible. The Company and the unaffiliated joint venture partner, 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 properties 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 IV, HHFNE, HVP III and HHF (the “Ventures”), the Company determined that the Ventures are not VIEs in accordance with the accounting standard for the consolidation of VIEs. As a result, the Company used the voting interest model under the accounting standard for consolidation in order to determine whether to consolidate the Ventures. Based upon each member's substantive participating rights over the activities of each entity as stipulated in the operating agreements, the Ventures are not consolidated by the Company and are accounted for under the equity method of accounting. The Company’s investments in the Ventures are included in Investment in real estate ventures, at equity on the Company’s consolidated balance sheets and the Company’s earnings from its investments in the Ventures are presented in Equity in 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 Ventures. The following is a summary of the financial position of the Ventures as of March 31, 2019 and December 31, 2018 (in thousands): March 31, December 31, 2019 2018 Assets Storage properties, net $ 733,440 $ 741,209 Other assets 17,321 16,042 Total assets $ 750,761 $ 757,251 Liabilities and equity Other liabilities $ 9,396 $ 7,911 Debt 413,955 413,848 Equity CubeSmart 94,092 95,796 Joint venture partners 233,318 239,696 Total liabilities and equity $ 750,761 $ 757,251 The following is a summary of results of operations of the Ventures for the three months ended March 31, 2019 and 2018 (in thousands): Three Months Ended March 31, 2019 2018 Total revenues $ 23,203 $ 20,910 Operating expenses 10,163 9,204 Other expense 142 194 Interest expense, net 4,216 2,898 Depreciation and amortization 9,506 9,449 Net income (loss) $ (824) $ (835) Company’s share of net income (loss) $ 261 $ (184) |
UNSECURED SENIOR NOTES
UNSECURED SENIOR NOTES | 3 Months Ended |
Mar. 31, 2019 | |
UNSECURED SENIOR NOTES | |
UNSECURED SENIOR NOTES | 6. UNSECURED SENIOR NOTES The Company’s unsecured senior notes are summarized as follows (collectively referred to as the “Senior Notes”): March 31, December 31, Effective Issuance Maturity Unsecured Senior Notes 2019 2018 Interest Rate Date Date (in thousands) $250M 4.800% Guaranteed Notes due 2022 $ 250,000 $ 250,000 4.82 % Jun-12 Jul-22 $300M 4.375% Guaranteed Notes due 2023 (1) 300,000 300,000 4.33 % Various (1) Dec-23 $300M 4.000% Guaranteed Notes due 2025 (2) 300,000 300,000 3.99 % Various (2) Nov-25 $300M 3.125% Guaranteed Notes due 2026 300,000 300,000 3.18 % Aug-16 Sep-26 $350M 4.375% Guaranteed Notes due 2029 350,000 — 4.46 % Jan-19 Feb-29 Principal balance outstanding 1,500,000 1,150,000 Less: Discount on issuance of unsecured senior notes, net (2,773) (568) Less: Loan procurement costs, net (8,535) (5,908) Total unsecured senior notes, net $ 1,488,692 $ 1,143,524 (1) On April 4, 2017, the Operating Partnership issued $50.0 million of its 4.375% senior notes due 2023, which are part of the same series as the $250.0 million principal amount of the Operating Partnership’s 4.375% senior notes due December 15, 2023 issued on December 17, 2013. The $50.0 million and $250.0 million tranches were priced at 105.040% and 98.995%, respectively, of the principal amount to yield 3.495% and 4.501%, respectively, to maturity. The combined weighted-average effective interest rate of the 2023 notes is 4.330%. (2) On April 4, 2017, the Operating Partnership issued $50.0 million of its 4.000% senior notes due 2025, which are part of the same series as the $250.0 million principal amount of the Operating Partnership’s 4.000% senior notes due November 15, 2025 issued on October 26, 2015. The $50.0 million and $250.0 million tranches were priced at 101.343% and 99.735%, respectively, of the principal amount to yield 3.811% and 4.032%, respectively, to maturity. The combined weighted-average effective interest rate of the 2025 notes is 3.994%. 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 March 31, 2019, 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 | 3 Months Ended |
Mar. 31, 2019 | |
REVOLVING CREDIT FACILITY AND UNSECURED TERM LOANS | |
REVOLVING CREDIT FACILITY AND UNSECURED TERM LOANS | 7. REVOLVING CREDIT FACILITY AND UNSECURED TERM LOANS On December 9, 2011, the Company entered into a credit agreement (the “Credit Facility”), which was subsequently amended on April 5, 2012, June 18, 2013, and April 22, 2015 to provide for, amongst other things, a $200.0 million unsecured term loan with a maturity date of January 31, 2019 and a $500.0 million unsecured revolving facility (the “Revolver”) with a maturity date of April 22, 2020. Pricing on the Revolver is dependent 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%. As of March 31, 2019, $403.2 million was available for borrowing under the Revolver. The available balance under the Revolver is reduced by an outstanding letter of credit of $0.7 million. On June 20, 2011, the Company entered into an unsecured term loan agreement (the “Term Loan Facility”), which was subsequently amended on June 18, 2013 and August 5, 2014, consisting of, amongst other things, a $100.0 million unsecured term loan with a seven-year maturity. The Company’s unsecured term loans under the Credit Facility and Term Loan Facility are summarized below: Carrying Value as of: Effective Interest March 31, December 31, Rate as of Maturity Unsecured Term Loans 2019 2018 March 31, 2019 (1) Date (in thousands) Credit Facility Unsecured term loan (2) $ — $ 200,000 — % Jan-19 Term Loan Facility Unsecured term loan 100,000 100,000 3.64 % Jan-20 Principal balance outstanding 100,000 300,000 Less: Loan procurement costs, net (139) (201) Total unsecured term loans, net $ 99,861 $ (1) Pricing on the Term Loan Facility and the unsecured term loan under the Credit Facility is dependent on the Company’s unsecured debt credit ratings. At the Company’s current Baa2/BBB level, amounts drawn under the term loan that matured in January 2019 were priced at 1.30% over LIBOR, while amounts drawn under the term loan that is scheduled to mature in January 2020 are priced at 1.15% over LIBOR. As of March 31, 2019, borrowings under the Credit Facility, inclusive of the Revolver, and Term Loan Facility, as amended, had an effective weighted average interest rate of 3.69%. (2) On January 31, 2019, the Company used a portion of the net proceeds from the issuance of $350.0 million of 4.375% Senior Notes due 2029 (the “2029 Notes”) to repay all of the outstanding indebtedness under the unsecured term loan portion of the Credit Facility that matured in January 2019. No further borrowings may be made under the Term Loan Facility or the unsecured term loan portion of the Credit Facility. The Company’s ability to borrow under the Revolver 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 March 31, 2019, 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 | 3 Months Ended |
Mar. 31, 2019 | |
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: March 31, December 31, Effective Maturity Mortgage Loans and Notes Payable 2019 2018 Interest Rate Date (in thousands) YSI 33 $ 9,126 $ 9,214 6.42 % Jul-19 YSI 26 7,967 8,022 4.56 % Nov-20 YSI 57 2,797 2,816 4.61 % Nov-20 YSI 55 21,916 22,041 4.85 % Jun-21 YSI 24 24,680 24,893 4.64 % Jun-21 YSI 65 2,351 2,363 3.85 % Jun-23 YSI 66 31,023 31,171 3.51 % Jun-23 YSI 68 5,585 5,626 3.78 % May-24 Principal balance outstanding 105,445 106,146 Plus: Unamortized fair value adjustment 2,372 2,551 Less: Loan procurement costs, net (403) (451) Total mortgage loans and notes payable, net $ 107,414 $ As of March 31, 2019 and December 31, 2018, the Company’s mortgage loans payable were secured by certain of its self-storage properties with net book values of approximately $229.6 million and $231.0 million, respectively. The following table represents the future principal payment requirements on the outstanding mortgage loans and notes payable as of March 31, 2019 (in thousands): 2019 $ 10,951 2020 12,791 2021 45,057 2022 923 2023 31,019 2024 and thereafter 4,704 Total mortgage payments 105,445 Plus: Unamortized fair value adjustment 2,372 Less: Loan procurement costs, net (403) Total mortgage loans and notes payable, net $ 107,414 |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE LOSS | 3 Months Ended |
Mar. 31, 2019 | |
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 three months ended March 31, 2019 (in thousands): Unrealized Gains (Losses) on Interest Rate Swaps Other comprehensive gain before reclassifications $ 230 Amounts reclassified from accumulated other comprehensive loss 10 (1) Net current-period other comprehensive income 240 Balance at December 31, 2018 (1,029) Balance at March 31, 2019 $ (789) (1) 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 | 3 Months Ended |
Mar. 31, 2019 | |
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 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. During 2018, the Company entered into interest rate swap agreements that qualified and were designated as cash flow hedges designed to reduce the impact of interest rate changes on a forecasted issuance of long-term debt. Therefore, the interest rate swaps were recorded on the consolidated balance sheet at fair value and the related gains or losses were deferred in shareholders’ equity as accumulated other comprehensive income or loss. These deferred gains and losses are amortized into interest expense during the period or periods in which the related interest payments affect earnings. The Company formally assessed, both at inception of the hedge and on an on-going basis, whether each derivative was highly-effective in offsetting changes in cash flows of the hedged item. If management determined that the derivative was highly-effective as a hedge, then the Company accounted for the derivative using hedge accounting, pursuant to which gains or losses inherent in the derivative did not impact the Company’s results of operations. If management determined that the derivative was not highly-effective as a hedge or if a derivative ceased to be a highly-effective hedge, the Company discontinued hedge accounting prospectively and reflected in its statement of operations realized and unrealized gains and losses with respect to the derivative. The following table summarizes the terms and fair values of the Company’s derivative financial instruments as of March 31, 2019 and December 31, 2018, respectively (dollars in thousands): Hedge Hedge Notional Amount Effective Fair Value Product Type March 31, 2019 December 31, 2018 Strike Date Maturity March 31, 2019 December 31, 2018 Swap Cash flow (1) $ — $ 75,000 % 6/28/2019 6/28/2029 $ — $ (516) Swap Cash flow (1) — 50,000 % 6/28/2019 6/28/2029 — (350) Swap Cash flow (1) — 25,000 % 6/28/2019 6/28/2029 — (173) $ — $ 150,000 $ — $ (1,039) (1) These interest rate swaps were entered into on December 24, 2018 to protect the Company against adverse fluctuations in interest rates by reducing exposure to variability in cash flows relating to interest payments on a forecasted issuance of long-term debt. On January 24, 2019, in conjunction with the issuance of the 2029 Notes, the Company settled these interest rate swaps for $0.8 million. The termination premium will be reclassified from accumulated other comprehensive loss as an increase to interest expense over the life of the 2029 Notes, which mature on February 15, 2029. The Company measured its derivative instruments at fair value and recorded them in the balance sheet as either an asset or liability. As of March 31, 2019 all derivative instruments had been settled. As of December 31, 2018, all derivative instruments were included in accounts payable, accrued expenses and other liabilities on the accompanying consolidated balance sheets. The effective portions of changes in the fair value of the derivatives are reported in accumulated other comprehensive loss. Amounts reported in accumulated other comprehensive loss related to derivatives are reclassified to interest expense as interest payments are made on the Company’s 2029 Notes. The change in unrealized losses on interest rate swaps reflects a reclassification of ten thousand dollars of unrealized losses from accumulated other comprehensive loss as an increase to interest expense during the three months ended March 31, 2019. The Company estimates that $0.1 million will be reclassified as an increase to interest expense in the next 12 months. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 31, 2019 | |
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. There were no financial assets or liabilities carried at fair value as of March 31, 2019. Financial assets and liabilities carried at fair value as of December 31, 2018 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 $ — $ 1,039 $ — Total liabilities at fair value $ — $ 1,039 $ — 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 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 the reporting dates, 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 March 31, 2019 and December 31, 2018. The aggregate carrying value and estimated fair value of the Company’s debt was $1.8 billion and $1.7 billion at March 31, 2019 and December 31, 2018, respectively. The fair value of debt estimates were based on a discounted cash flow analysis assuming market interest rates for comparable obligations at March 31, 2019 and December 31, 2018. 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 | 3 Months Ended |
Mar. 31, 2019 | |
NONCONTROLLING INTERESTS | |
NONCONTROLLING INTERESTS | 12. NONCONTROLLING INTERESTS Interests in Consolidated 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 Estimated Ownership March 31, 2019 Consolidated Joint Ventures of Stores Location Opening Interest Total Assets Total Liabilities Shirlington Rd II, LLC ("SH2") (1) 1 Arlington, VA Q1 2021 (est.) 90% $ 8,194 $ 4 CS SJM E 92nd Street, LLC ("92nd St") (2) 1 New York, NY Q2 2020 (est.) 90% 15,956 14,785 CS SDP Newtonville, LLC ("Newton") (2) 1 Newton, MA Q1 2020 (est.) 90% 7,327 799 CS 1158 McDonald Ave, LLC ("McDonald Ave") (3) 1 Brooklyn, NY Q3 2019 (est.) 51% 32,905 8,770 CS SDP Waltham, LLC ("Waltham") (2) 1 Waltham, MA Q2 2019 (est.) 90% 16,276 10,540 CS 160 East 22nd St, LLC ("22nd St") (3) 1 Bayonne, NJ Q2 2019 51% 28,787 16,809 2225 46th St, LLC ("46th St") (3) 1 Queens, NY Q2 2019 51% 45,328 16,119 444 55 th Street Holdings, LLC ("55th St") (4) 1 New York, NY Q3 2017 90% 77,882 32,712 186 Jamaica Avenue, LLC ("Jamaica Ave") (2) 1 Queens, NY Q4 2015 90% 17,312 12,508 Shirlington Rd, LLC ("SH1") (1) 1 Arlington, VA Q2 2015 90% 14,958 221 10 $ 264,925 $ 113,267 (1) On March 7, 2019, the Company acquired the noncontrolling member’s ownership interest in SH1, inclusive of its promoted interest in the venture, for $10.0 million. Prior to this transaction, the noncontrolling member’s interest was reported in Noncontrolling interests in subsidiaries on the consolidated balance sheets. Since the Company retained its controlling interest in the joint venture, this transaction was accounted for as an equity transaction. The carrying amount of the noncontrolling interest was reduced to zero to reflect the purchase, and the $9.7 million difference between the purchase price paid by the Company and the carrying amount of the noncontrolling interest was recorded as an adjustment to equity attributable to the Company. In conjunction with the Company’s acquisition of the noncontrolling interest in SH1, the $12.2 million related party loan extended by the Company to the venture during the construction period was repaid in full. Subsequently, the noncontrolling member re-acquired a 10% interest in SH1 and a 10% interest in SH2 for a combined $4.8 million, which is included in Noncontrolling interests in subsidiaries on the consolidated balance sheets. (2) The Company has a related party loan commitment to these ventures to fund all or a portion of the construction costs. As of March 31, 2019, the Company has funded $1.5 million of a total $6.9 million loan commitment to 92 nd St, $0.7 million of a total $12.1 million loan commitment to Newton, $9.0 million of a total $10.8 million loan commitment to Waltham and $12.4 million of a total $12.8 million loan commitment to Jamaica Ave, which are included in the total liability amounts within the table above. These loans and related interest were eliminated for consolidation purposes. (3) The noncontrolling members of McDonald Ave, 22nd St and 46th St have the option to put their ownership interest in the ventures to the Company for $10.0 million, $11.5 million and $15.2 million, respectively, within the one-year period after construction of each store is substantially complete. Additionally, the Company has a one-year option to call the ownership interest of the noncontrolling members of McDonald Ave, 22nd St and 46th St, for $10.0 million, $11.5 million and $15.2 million, respectively, beginning on the second anniversary of the respective store’s construction being substantially complete. The Company is accreting the respective liabilities during the development periods and, as of March 31, 2019, has accrued $7.8 million, $10.7 million and $15.2 million, related to McDonald Ave, 22 nd St and 46th St, respectively. (4) In connection with the acquired property, 55th 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. 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 1.0% of the outstanding OP Units as of March 31, 2019 and December 31, 2018 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 properties. 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 January 31, 2018, the Company acquired a store in Texas for $12.2 million and assumed an existing mortgage loan with an outstanding balance of approximately $7.2 million, which was immediately repaid by the Company. In conjunction with the closing, the Company paid $0.2 million in cash and issued 168,011 OP Units, valued at approximately $4.8 million, to pay the remaining consideration. As of March 31, 2019 and December 31, 2018, 1,885,570 and 1,945,570 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 March 31, 2019 and December 31, 2018. As of March 31, 2019, the Operating Partnership recorded an increase in the value of OP Units owned by third parties and a corresponding decrease to capital of $6.7 million. As of December 31, 2018, the Operating Partnership recorded an increase in the value of OP Units owned by third parties and corresponding decrease to capital of $0.3 million. |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2019 | |
LEASES | |
LEASES | 13. LEASES CubeSmart as Lessor The Company derives revenue primarily from rents received from customers who rent cubes at its self-storage properties under month-to-month leases for personal or business use. The self-storage lease agreements utilized by the Company vary slightly to comply with state-specific laws and regulations, but generally provide for automatic monthly renewals, flexibility to increase rental rates over time as market conditions permit and the collection of contingent fees such as administrative and late fees. None of the self-storage lease agreements contain options that allow the customer to purchase the leased space at any time during, or at the expiration of, the lease term. All self-storage leases in which the Company serves as lessor have been classified as operating leases. Accordingly, storage cubes are carried at historical cost less accumulated depreciation and impairment, if any, and are included in Storage properties on the Company’s consolidated balance sheets. Operating lease income for amounts received under the Company’s self-storage lease agreements is recognized on a straight-line basis which, due to the month-to-month nature of the leases, results in the recognition of income during the initial term and each subsequent monthly renewal using the then-in-place rent amount. Operating lease income is included in Rental income within the Company’s consolidated statements of operations. Variable lease income related to the Company’s self-storage lease agreements consists of administrative and late fees charged to customers. For the three months ended March 31, 2019, administrative and late fees totaled $5.4 million and are included in Other property related income within the Company’s consolidated statements of operations. CubeSmart as Lessee The Company serves as lessee in lease agreements for land, office space, automobiles and certain equipment, which have remaining lease terms ranging from one year to 45 years. Certain of the Company’s leases contain provisions that (1) provide for one or more options to renew, with renewal options that can extend the lease term from one year to 69 years, (2) allow for early termination at certain points during the lease term and/or (3) give the Company the option to purchase the leased property. In all cases, the exercise of the lease renewal, termination and purchase options, if provided for in the lease, are at the Company’s sole discretion. Certain of the Company’s lease agreements, particularly its land leases, require rental payments that are periodically adjusted for inflation using a defined index. None of the Company’s lease agreements contain any material residual value guarantees or material restrictive covenants. As a result of the Company’s election of the package of practical expedients permitted within ASC 842, which among other things, allows for the carryforward of historical lease classification, all of the Company’s lease agreements have been classified as operating leases. Lease expense for payments related to the Company’s operating leases is recognized on a straight-line basis over the related lease term, which includes options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Right-of-use assets represent the Company’s right to use an underlying asset during the lease term and lease liabilities represent the Company’s obligation to make lease payments as specified in the lease. Right-of-use assets and lease liabilities related to the Company’s operating leases are recognized at the lease commencement date based on the present value of the remaining lease payments over the lease term. As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available surrounding the Company’s unsecured borrowing rates and implied secured spread at the lease commencement date in determining the present value of lease payments. The right-of-use asset also includes any lease payments made at or before lease commencement less any lease incentives. As of March 31, 2019, the Company had right-of-use assets and lease liabilities related to its operating leases of $55.5 million and $60.7 million, which are included in Other assets, net and Accounts payable, accrued expenses and other liabilities on the Company’s consolidated balance sheets, respectively. As of March 31, 2019, the Company’s weighted-average remaining lease term and weighted-average discount rate related to its operating leases were 34.4 years and 4.70%, respectively. For the three months ended March 31, 2019, the Company’s lease cost consists of the following components, each of which is included in Property operating expenses within the Company’s consolidated statements of operations: Three Months Ended March 31, 2019 (in thousands) Operating lease cost $ 980 Short-term lease cost (1) 296 Total lease cost $ 1,276 (1) Represents automobile leases that have a lease term of 12 months. The Company has made an accounting policy election not to apply the recognition requirements of ASC 842 to this asset class. The lease cost associated with these leases is recognized on a straight-line basis over the related lease term. The following table represents the future operating lease liability maturities as of March 31, 2019 (in thousands): 2019 $ 2,199 2020 2,936 2021 3,008 2022 3,180 2023 3,258 2024 and thereafter 116,429 Total operating lease payments 131,010 Less: Imputed interest (70,317) Present value of operating lease liabilities $ 60,693 During the three months ended March 31, 2019, the cash paid for amounts included in the measurement of lease liabilities related to the Company’s operating leases was approximately $0.7 million, which is included as an operating cash outflow within the consolidated statements of cash flows. As of and during the three months ended March 31, 2019, the Company did not enter into any lease agreements set to commence in the future and there were no newly leased assets for which a right-of-use asset was recorded in exchange for a new lease liability. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2019 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 14. COMMITMENTS AND CONTINGENCIES The Company is involved in claims from time to time, which arise in the ordinary course of business. In accordance with applicable accounting guidance, management establishes an accrued liability for litigation when those matters present loss contingencies that are both probable and reasonably estimable. In such cases, there may be exposure to loss in excess of those amounts accrued. The estimated loss, if any, is based upon currently available information and is subject to significant judgment, a variety of assumptions, and known and unknown uncertainties. In the opinion of management, the Company has made adequate provisions for potential liabilities, arising from any such matters, which are included in Accounts payable, accrued expenses and other liabilities on the Company’s consolidated balance sheets. On January 11, 2019, a settlement agreement was entered into for a class action alleging violation of a state specific deceptive and unfair trade practices act. During the year ended December 31, 2018, the Company recorded a $1.8 million charge related to this legal action, which is included in Accounts payable, accrued expenses and other liabilities on the Company’s consolidated balance sheets and in General and administrative on the Company’s consolidated statements of operations. The settlement agreement was preliminarily approved on April 3, 2019. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2019 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | 15. RELATED PARTY TRANSACTIONS The Company provides management services to certain joint ventures and other related parties. Management agreements provide for fee income to the Company based on a percentage of revenues at the managed stores. Total management fees for unconsolidated real estate ventures or other entities in which the Company held an ownership interest for the three months ended March 31, 2019 and 2018 totaled $1.2 million and $1.0 million, respectively. The management agreements for certain joint ventures, other related parties and third-party stores provide for the reimbursement to the Company for certain expenses incurred to manage the stores. These amounts consist of amounts due for management fees, payroll, and other store expenses. The amounts due to the Company were $12.8 million and $10.6 million as of March 31, 2019 and December 31, 2018, respectively, and are reflected in Other assets, net on the Company’s consolidated balance sheets. Additionally, as discussed in note 12, the Company had outstanding mortgage loans receivable from consolidated joint ventures of $23.6 million and $33.2 million as of March 31, 2019 and December 31, 2018, respectively, which are eliminated for consolidation purposes. The Company believes that all of these related-party receivables are fully collectible. The HVP III, HVP IV, and HHFNE operating agreements provide for acquisition fees payable from HVP III, HVP IV, and HHFNE to the Company in an amount equal to 0.5% of the purchase price upon the closing of an acquisition by HVP III, HVP IV, and HHFNE, or any of their subsidiaries and completion of certain measures as defined in the operating agreements. During the three months ended March 31, 2018, the Company recognized $0.3 million in acquisition fees. There were no acquisition fees recognized during the three months ended March 31, 2019. Acquisition fees are included in Other income on the consolidated statements of operations. |
PRO FORMA FINANCIAL INFORMATION
PRO FORMA FINANCIAL INFORMATION | 3 Months Ended |
Mar. 31, 2019 | |
PRO FORMA FINANCIAL INFORMATION | |
PRO FORMA FINANCIAL INFORMATION | 16. PRO FORMA FINANCIAL INFORMATION During the three months ended March 31, 2019 and the year ended December 31, 2018, the Company acquired one store for a purchase price of $22.0 million (see note 4) and ten stores for an aggregate purchase price of approximately $227.5 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 2019 and 2018 as if each had occurred as of January 1, 2018 and 2017, 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 three months ended March 31, 2019 and 2018 based on the assumptions described above: Three Months Ended March 31, 2019 2018 (in thousands, except per share data) Pro forma revenues $ 153,058 $ 146,368 Pro forma net income $ 38,635 $ 36,303 Earnings per share attributable to common shareholders: Basic - as reported $ 0.19 $ 0.19 Diluted - as reported $ 0.19 $ 0.19 Basic - as pro forma $ 0.20 $ 0.20 Diluted - as pro forma $ 0.20 $ 0.20 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
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, 2018, 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, 2018. The results of operations for the three months ended March 31, 2019 and 2018 are not necessarily indicative of the results of operations to be expected for any future period or the full year. The Operating Partnership 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. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2017-12 – Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. The purpose of this updated guidance is to better align a company’s financial reporting for hedging activities with the economic objectives of those activities. The standard became effective on January 1, 2019. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements . 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 determines 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 are accounted for similar to previous guidance for operating leases. The new standard requires lessors to account for leases using an approach that is substantially equivalent to previous guidance for sales-type leases, direct financing leases and operating leases. The Company adopted the standard on January 1, 2019, the date it became effective for public companies, using the modified retrospective approach whereby the cumulative effect of adoption was recognized on the adoption date and prior periods were not restated. There was no net cumulative effect adjustment to retained earnings as of January 1, 2019 as a result of this adoption. Upon adoption, the Company elected the package of practical expedients permitted within the standard, which among other things, allows for the carryforward of historical lease classification. The Company also elected the practical expedient provided to lessors in a subsequent amendment to the standard that removed the requirement to separate lease and nonlease components, provided certain conditions were met. Refer to note 13 for the impact of the adoption of ASU No. 2016-02 – Leases (Topic 842) on the Company’s consolidated financial statements. |
STORAGE PROPERTIES (Tables)
STORAGE PROPERTIES (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
STORAGE PROPERTIES | |
Summary of real estate assets | March 31, December 31, 2019 2018 (in thousands) Land $ 809,403 $ 806,916 Buildings and improvements 3,364,592 3,343,173 Equipment 167,140 176,583 Construction in progress 148,597 136,783 Storage properties 4,489,732 4,463,455 Less: Accumulated depreciation (884,941) (862,487) Storage properties, net $ 3,604,791 $ 3,600,968 |
Schedule of acquisitions and dispositions of real estate assets | Number of Purchase / Sale Price Asset/Portfolio Market Transaction Date Stores (in thousands) 2019 Acquisitions: Maryland Asset Baltimore / DC March 2019 1 $ 22,000 1 $ 2018 Acquisitions: Texas Asset Texas Markets - Major January 2018 1 $ 12,200 Texas Asset Texas Markets - Major May 2018 1 19,000 Metro DC Asset Baltimore / DC July 2018 1 34,200 Nevada Asset Las Vegas September 2018 1 14,350 North Carolina Asset Charlotte September 2018 1 11,000 California Asset Los Angeles October 2018 1 53,250 Texas Asset Texas Markets - Major October 2018 1 23,150 California Asset San Diego November 2018 1 19,118 New York Asset New York / Northern NJ November 2018 1 37,000 Illinois Asset Chicago December 2018 1 4,250 10 $ 2018 Dispositions: Arizona Assets Phoenix November 2018 2 $ 17,502 2 $ |
INVESTMENT ACTIVITY (Tables)
INVESTMENT ACTIVITY (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
INVESTMENT ACTIVITY | |
Schedule of revenue and earnings from acquisitions since the acquisition dates included in consolidated statement of operations | Three Months Ended March 31, 2019 (in thousands) Total revenue $ 78 Net loss (74) |
INVESTMENT IN UNCONSOLIDATED _2
INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURE (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURES | |
Summary of the financial position of the ventures | March 31, December 31, 2019 2018 Assets Storage properties, net $ 733,440 $ 741,209 Other assets 17,321 16,042 Total assets $ 750,761 $ 757,251 Liabilities and equity Other liabilities $ 9,396 $ 7,911 Debt 413,955 413,848 Equity CubeSmart 94,092 95,796 Joint venture partners 233,318 239,696 Total liabilities and equity $ 750,761 $ 757,251 |
Summary of results of operations of the ventures | Three Months Ended March 31, 2019 2018 Total revenues $ 23,203 $ 20,910 Operating expenses 10,163 9,204 Other expense 142 194 Interest expense, net 4,216 2,898 Depreciation and amortization 9,506 9,449 Net income (loss) $ (824) $ (835) Company’s share of net income (loss) $ 261 $ (184) |
UNSECURED SENIOR NOTES (Tables)
UNSECURED SENIOR NOTES (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Senior Notes | |
Summary of debt | March 31, December 31, Effective Issuance Maturity Unsecured Senior Notes 2019 2018 Interest Rate Date Date (in thousands) $250M 4.800% Guaranteed Notes due 2022 $ 250,000 $ 250,000 4.82 % Jun-12 Jul-22 $300M 4.375% Guaranteed Notes due 2023 (1) 300,000 300,000 4.33 % Various (1) Dec-23 $300M 4.000% Guaranteed Notes due 2025 (2) 300,000 300,000 3.99 % Various (2) Nov-25 $300M 3.125% Guaranteed Notes due 2026 300,000 300,000 3.18 % Aug-16 Sep-26 $350M 4.375% Guaranteed Notes due 2029 350,000 — 4.46 % Jan-19 Feb-29 Principal balance outstanding 1,500,000 1,150,000 Less: Discount on issuance of unsecured senior notes, net (2,773) (568) Less: Loan procurement costs, net (8,535) (5,908) Total unsecured senior notes, net $ 1,488,692 $ 1,143,524 (1) On April 4, 2017, the Operating Partnership issued $50.0 million of its 4.375% senior notes due 2023, which are part of the same series as the $250.0 million principal amount of the Operating Partnership’s 4.375% senior notes due December 15, 2023 issued on December 17, 2013. The $50.0 million and $250.0 million tranches were priced at 105.040% and 98.995%, respectively, of the principal amount to yield 3.495% and 4.501%, respectively, to maturity. The combined weighted-average effective interest rate of the 2023 notes is 4.330%. (2) On April 4, 2017, the Operating Partnership issued $50.0 million of its 4.000% senior notes due 2025, which are part of the same series as the $250.0 million principal amount of the Operating Partnership’s 4.000% senior notes due November 15, 2025 issued on October 26, 2015. The $50.0 million and $250.0 million tranches were priced at 101.343% and 99.735%, respectively, of the principal amount to yield 3.811% and 4.032%, respectively, to maturity. The combined weighted-average effective interest rate of the 2025 notes is 3.994%. |
REVOLVING CREDIT FACILITY AND_2
REVOLVING CREDIT FACILITY AND UNSECURED TERM LOANS (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Credit Facility and Term Loan Facility | |
Summary of debt | Carrying Value as of: Effective Interest March 31, December 31, Rate as of Maturity Unsecured Term Loans 2019 2018 March 31, 2019 (1) Date (in thousands) Credit Facility Unsecured term loan (2) $ — $ 200,000 — % Jan-19 Term Loan Facility Unsecured term loan 100,000 100,000 3.64 % Jan-20 Principal balance outstanding 100,000 300,000 Less: Loan procurement costs, net (139) (201) Total unsecured term loans, net $ 99,861 $ (1) Pricing on the Term Loan Facility and the unsecured term loan under the Credit Facility is dependent on the Company’s unsecured debt credit ratings. At the Company’s current Baa2/BBB level, amounts drawn under the term loan that matured in January 2019 were priced at 1.30% over LIBOR, while amounts drawn under the term loan that is scheduled to mature in January 2020 are priced at 1.15% over LIBOR. As of March 31, 2019, borrowings under the Credit Facility, inclusive of the Revolver, and Term Loan Facility, as amended, had an effective weighted average interest rate of 3.69%. (2) On January 31, 2019, the Company used a portion of the net proceeds from the issuance of $350.0 million of 4.375% Senior Notes due 2029 (the “2029 Notes”) to repay all of the outstanding indebtedness under the unsecured term loan portion of the Credit Facility that matured in January 2019. |
MORTGAGE LOANS AND NOTES PAYA_2
MORTGAGE LOANS AND NOTES PAYABLE (Tables) - Mortgages | 3 Months Ended |
Mar. 31, 2019 | |
Summary of debt | Carrying Value as of: March 31, December 31, Effective Maturity Mortgage Loans and Notes Payable 2019 2018 Interest Rate Date (in thousands) YSI 33 $ 9,126 $ 9,214 6.42 % Jul-19 YSI 26 7,967 8,022 4.56 % Nov-20 YSI 57 2,797 2,816 4.61 % Nov-20 YSI 55 21,916 22,041 4.85 % Jun-21 YSI 24 24,680 24,893 4.64 % Jun-21 YSI 65 2,351 2,363 3.85 % Jun-23 YSI 66 31,023 31,171 3.51 % Jun-23 YSI 68 5,585 5,626 3.78 % May-24 Principal balance outstanding 105,445 106,146 Plus: Unamortized fair value adjustment 2,372 2,551 Less: Loan procurement costs, net (403) (451) Total mortgage loans and notes payable, net $ 107,414 $ |
Schedule of the future principal payment requirements on the outstanding mortgage loans and notes payable | The following table represents the future principal payment requirements on the outstanding mortgage loans and notes payable as of March 31, 2019 (in thousands): 2019 $ 10,951 2020 12,791 2021 45,057 2022 923 2023 31,019 2024 and thereafter 4,704 Total mortgage payments 105,445 Plus: Unamortized fair value adjustment 2,372 Less: Loan procurement costs, net (403) Total mortgage loans and notes payable, net $ 107,414 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | |
Summary of changes in accumulated other comprehensive loss by component | The following table summarizes the changes in accumulated other comprehensive loss by component for the three months ended March 31, 2019 (in thousands): Unrealized Gains (Losses) on Interest Rate Swaps Other comprehensive gain before reclassifications $ 230 Amounts reclassified from accumulated other comprehensive loss 10 (1) Net current-period other comprehensive income 240 Balance at December 31, 2018 (1,029) Balance at March 31, 2019 $ (789) See note 10 for additional information about the effects of the amounts reclassified. |
RISK MANAGEMENT AND USE OF FI_2
RISK MANAGEMENT AND USE OF FINANCIAL INSTRUMENTS (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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 March 31, 2019 and December 31, 2018, respectively (dollars in thousands): Hedge Hedge Notional Amount Effective Fair Value Product Type March 31, 2019 December 31, 2018 Strike Date Maturity March 31, 2019 December 31, 2018 Swap Cash flow (1) $ — $ 75,000 % 6/28/2019 6/28/2029 $ — $ (516) Swap Cash flow (1) — 50,000 % 6/28/2019 6/28/2029 — (350) Swap Cash flow (1) — 25,000 % 6/28/2019 6/28/2029 — (173) $ — $ 150,000 $ — $ (1,039) (1) These interest rate swaps were entered into on December 24, 2018 to protect the Company against adverse fluctuations in interest rates by reducing exposure to variability in cash flows relating to interest payments on a forecasted issuance of long-term debt. On January 24, 2019, in conjunction with the issuance of the 2029 Notes, the Company settled these interest rate swaps for $0.8 million. The termination premium will be reclassified from accumulated other comprehensive loss as an increase to interest expense over the life of the 2029 Notes, which mature on February 15, 2029. |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
FAIR VALUE MEASUREMENTS | |
Schedule of financial assets and liabilities carried at fair value | Level 1 Level 2 Level 3 Interest rate swap derivative liabilities $ — $ 1,039 $ — Total liabilities at fair value $ — $ 1,039 $ — |
NONCONTROLLING INTERESTS (Table
NONCONTROLLING INTERESTS (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
NONCONTROLLING INTERESTS | |
Schedule of noncontrolling interests in subsidiaries | Date Opened / CubeSmart Number Estimated Ownership March 31, 2019 Consolidated Joint Ventures of Stores Location Opening Interest Total Assets Total Liabilities Shirlington Rd II, LLC ("SH2") (1) 1 Arlington, VA Q1 2021 (est.) 90% $ 8,194 $ 4 CS SJM E 92nd Street, LLC ("92nd St") (2) 1 New York, NY Q2 2020 (est.) 90% 15,956 14,785 CS SDP Newtonville, LLC ("Newton") (2) 1 Newton, MA Q1 2020 (est.) 90% 7,327 799 CS 1158 McDonald Ave, LLC ("McDonald Ave") (3) 1 Brooklyn, NY Q3 2019 (est.) 51% 32,905 8,770 CS SDP Waltham, LLC ("Waltham") (2) 1 Waltham, MA Q2 2019 (est.) 90% 16,276 10,540 CS 160 East 22nd St, LLC ("22nd St") (3) 1 Bayonne, NJ Q2 2019 51% 28,787 16,809 2225 46th St, LLC ("46th St") (3) 1 Queens, NY Q2 2019 51% 45,328 16,119 444 55 th Street Holdings, LLC ("55th St") (4) 1 New York, NY Q3 2017 90% 77,882 32,712 186 Jamaica Avenue, LLC ("Jamaica Ave") (2) 1 Queens, NY Q4 2015 90% 17,312 12,508 Shirlington Rd, LLC ("SH1") (1) 1 Arlington, VA Q2 2015 90% 14,958 221 10 $ 264,925 $ 113,267 (1) On March 7, 2019, the Company acquired the noncontrolling member’s ownership interest in SH1, inclusive of its promoted interest in the venture, for $10.0 million. Prior to this transaction, the noncontrolling member’s interest was reported in Noncontrolling interests in subsidiaries on the consolidated balance sheets. Since the Company retained its controlling interest in the joint venture, this transaction was accounted for as an equity transaction. The carrying amount of the noncontrolling interest was reduced to zero to reflect the purchase, and the $9.7 million difference between the purchase price paid by the Company and the carrying amount of the noncontrolling interest was recorded as an adjustment to equity attributable to the Company. In conjunction with the Company’s acquisition of the noncontrolling interest in SH1, the $12.2 million related party loan extended by the Company to the venture during the construction period was repaid in full. Subsequently, the noncontrolling member re-acquired a 10% interest in SH1 and a 10% interest in SH2 for a combined $4.8 million, which is included in Noncontrolling interests in subsidiaries on the consolidated balance sheets. (2) The Company has a related party loan commitment to these ventures to fund all or a portion of the construction costs. As of March 31, 2019, the Company has funded $1.5 million of a total $6.9 million loan commitment to 92 nd St, $0.7 million of a total $12.1 million loan commitment to Newton, $9.0 million of a total $10.8 million loan commitment to Waltham and $12.4 million of a total $12.8 million loan commitment to Jamaica Ave, which are included in the total liability amounts within the table above. These loans and related interest were eliminated for consolidation purposes. (3) The noncontrolling members of McDonald Ave, 22nd St and 46th St have the option to put their ownership interest in the ventures to the Company for $10.0 million, $11.5 million and $15.2 million, respectively, within the one-year period after construction of each store is substantially complete. Additionally, the Company has a one-year option to call the ownership interest of the noncontrolling members of McDonald Ave, 22nd St and 46th St, for $10.0 million, $11.5 million and $15.2 million, respectively, beginning on the second anniversary of the respective store’s construction being substantially complete. The Company is accreting the respective liabilities during the development periods and, as of March 31, 2019, has accrued $7.8 million, $10.7 million and $15.2 million, related to McDonald Ave, 22 nd St and 46th St, respectively. (4) In connection with the acquired property, 55th 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. |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
LEASES | |
Summary of lease cost | Three Months Ended March 31, 2019 (in thousands) Operating lease cost $ 980 Short-term lease cost (1) 296 Total lease cost $ 1,276 (1) Represents automobile leases that have a lease term of 12 months. The Company has made an accounting policy election not to apply the recognition requirements of ASC 842 to this asset class. The lease cost associated with these leases is recognized on a straight-line basis over the related lease term. |
Schedule of future operating lease liability maturities | The following table represents the future operating lease liability maturities as of March 31, 2019 (in thousands): 2019 $ 2,199 2020 2,936 2021 3,008 2022 3,180 2023 3,258 2024 and thereafter 116,429 Total operating lease payments 131,010 Less: Imputed interest (70,317) Present value of operating lease liabilities $ 60,693 |
PRO FORMA FINANCIAL INFORMATI_2
PRO FORMA FINANCIAL INFORMATION (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
PRO FORMA FINANCIAL INFORMATION | |
Schedule of consolidated results of operations on a pro forma basis | Three Months Ended March 31, 2019 2018 (in thousands, except per share data) Pro forma revenues $ 153,058 $ 146,368 Pro forma net income $ 38,635 $ 36,303 Earnings per share attributable to common shareholders: Basic - as reported $ 0.19 $ 0.19 Diluted - as reported $ 0.19 $ 0.19 Basic - as pro forma $ 0.20 $ 0.20 Diluted - as pro forma $ 0.20 $ 0.20 |
ORGANIZATION AND NATURE OF OP_2
ORGANIZATION AND NATURE OF OPERATIONS (Details) | 3 Months Ended |
Mar. 31, 2019statesegment | |
Number of states in which self-storage facilities are located | state | 23 |
Number of reportable segments | segment | 1 |
Common stock, conversion ratio | 1 |
Cubesmart | |
Percentage of the entity's partnership interest in Operating Partnership | 99.00% |
STORAGE PROPERTIES - Summary (D
STORAGE PROPERTIES - Summary (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
STORAGE FACILITIES | ||
Storage properties | $ 4,489,732 | $ 4,463,455 |
Less: Accumulated depreciation | (884,941) | (862,487) |
Storage properties, net (including VIE assets of $248,805 and $330,986, respectively) | 3,604,791 | 3,600,968 |
Land | ||
STORAGE FACILITIES | ||
Storage properties | 809,403 | 806,916 |
Buildings and improvements | ||
STORAGE FACILITIES | ||
Storage properties | 3,364,592 | 3,343,173 |
Equipment | ||
STORAGE FACILITIES | ||
Storage properties | 167,140 | 176,583 |
Construction in progress | ||
STORAGE FACILITIES | ||
Storage properties | $ 148,597 | $ 136,783 |
STORAGE PROPERTIES - Activity (
STORAGE PROPERTIES - Activity (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended |
Nov. 30, 2018USD ($)facility | Mar. 31, 2019USD ($)facility | Dec. 31, 2018USD ($)facility | |
2019 Acquisitions | |||
STORAGE FACILITIES | |||
Number of Facilities, acquisitions (in properties) | facility | 1 | ||
Purchase Price | $ | $ 22,000 | ||
2019 Acquisitions | Maryland Asset March 2019 | |||
STORAGE FACILITIES | |||
Number of Facilities, acquisitions (in properties) | facility | 1 | ||
Purchase Price | $ | $ 22,000 | ||
2018 Acquisitions | |||
STORAGE FACILITIES | |||
Number of Facilities, acquisitions (in properties) | facility | 10 | ||
Purchase Price | $ | $ 227,518 | ||
2018 Acquisitions | Texas Asset January 2018 | |||
STORAGE FACILITIES | |||
Number of Facilities, acquisitions (in properties) | facility | 1 | ||
Purchase Price | $ | $ 12,200 | ||
2018 Acquisitions | Texas Asset May 2018 | |||
STORAGE FACILITIES | |||
Number of Facilities, acquisitions (in properties) | facility | 1 | ||
Purchase Price | $ | $ 19,000 | ||
2018 Acquisitions | Metro DC Asset July 2018 | |||
STORAGE FACILITIES | |||
Number of Facilities, acquisitions (in properties) | facility | 1 | ||
Purchase Price | $ | $ 34,200 | ||
2018 Acquisitions | Nevada Asset September 2018 | |||
STORAGE FACILITIES | |||
Number of Facilities, acquisitions (in properties) | facility | 1 | ||
Purchase Price | $ | $ 14,350 | ||
2018 Acquisitions | North Carolina Asset September 2018 | |||
STORAGE FACILITIES | |||
Number of Facilities, acquisitions (in properties) | facility | 1 | ||
Purchase Price | $ | $ 11,000 | ||
2018 Acquisitions | California Asset October 2018 | |||
STORAGE FACILITIES | |||
Number of Facilities, acquisitions (in properties) | facility | 1 | ||
Purchase Price | $ | $ 53,250 | ||
2018 Acquisitions | Texas Asset October 2018 | |||
STORAGE FACILITIES | |||
Number of Facilities, acquisitions (in properties) | facility | 1 | ||
Purchase Price | $ | $ 23,150 | ||
2018 Acquisitions | California Asset November 2018 | |||
STORAGE FACILITIES | |||
Number of Facilities, acquisitions (in properties) | facility | 1 | ||
Purchase Price | $ | $ 19,118 | ||
2018 Acquisitions | New York Asset November 2018 | |||
STORAGE FACILITIES | |||
Number of Facilities, acquisitions (in properties) | facility | 1 | ||
Purchase Price | $ | $ 37,000 | ||
2018 Acquisitions | Illinois Asset December 2018 | |||
STORAGE FACILITIES | |||
Number of Facilities, acquisitions (in properties) | facility | 1 | ||
Purchase Price | $ | $ 4,250 | ||
2018 Dispositions | |||
STORAGE FACILITIES | |||
Number of Facilities, dispositions (in properties) | facility | 2 | ||
Sale Price | $ | $ 17,502 | ||
2018 Dispositions | Arizona Asset | |||
STORAGE FACILITIES | |||
Number of Facilities, dispositions (in properties) | facility | 2 | 2 | |
Sale Price | $ | $ 17,500 | $ 17,502 |
INVESTMENT ACTIVITY (Details)
INVESTMENT ACTIVITY (Details) $ in Thousands | Jan. 31, 2018USD ($)shares | Nov. 30, 2018USD ($)facility | Mar. 31, 2019USD ($)facility | Mar. 31, 2018USD ($) | Dec. 31, 2018USD ($)propertyfacilityshares |
Self-storage facilities | |||||
Storage properties | $ 4,489,732 | $ 4,463,455 | |||
Restricted cash | $ 3,008 | 2,718 | |||
Common stock, conversion ratio | 1 | ||||
Acquisition of noncontrolling interest | $ 10,000 | $ 300 | |||
2019 Acquisitions | |||||
Self-storage facilities | |||||
Number of self-storage facilities acquired | facility | 1 | ||||
Aggregate purchase price | $ 22,000 | ||||
2019 Acquisitions | Self storage under construction | |||||
Self-storage facilities | |||||
Number of facilities under contract | facility | 3 | ||||
Deposit | $ 2,700 | ||||
Expected aggregate purchase or sales price | $ 67,500 | ||||
2019 Acquisitions | Maryland Asset March 2019 | |||||
Self-storage facilities | |||||
Number of self-storage facilities acquired | facility | 1 | ||||
Aggregate purchase price | $ 22,000 | ||||
Intangible value of the in-place leases | $ 800 | ||||
Estimated life | 12 months | ||||
Amortization expense | $ 100 | ||||
2018 Acquisitions | |||||
Self-storage facilities | |||||
Number of self-storage facilities acquired | facility | 10 | ||||
Aggregate purchase price | $ 227,518 | ||||
Summary of the amounts of revenue and earnings of the 2016 and 2015 acquisitions since the acquisition dates | |||||
Total revenue | 78 | ||||
Net loss | (74) | ||||
2018 Acquisitions | Self storage under construction | |||||
Self-storage facilities | |||||
Number of facilities under contract | facility | 1 | ||||
2018 Acquisitions | Self-storage facilities located in US | |||||
Self-storage facilities | |||||
Number of self-storage facilities acquired | facility | 10 | ||||
Aggregate purchase price | $ 227,500 | ||||
Cash paid for acquisition | 200 | ||||
Intangible value of the in-place leases | $ 11,300 | ||||
Estimated life | 12 months | ||||
Amortization expense | $ 2,700 | $ 100 | |||
Number of properties, assumed mortgage | facility | 1 | ||||
Assumed mortgage debt, at fair value | $ 7,200 | ||||
OP units issued (in shares) | shares | 168,011 | ||||
Issuance of OP Shares | $ 4,800 | ||||
Cash paid for acquisition of remaining interest in real estate ventures | $ 200 | ||||
2018 Dispositions | |||||
Self-storage facilities | |||||
Number of Facilities, dispositions (in properties) | facility | 2 | ||||
Aggregate sale price | $ 17,502 | ||||
2018 Dispositions | Arizona Asset | |||||
Self-storage facilities | |||||
Number of Facilities, dispositions (in properties) | facility | 2 | 2 | |||
Aggregate sale price | $ 17,500 | $ 17,502 | |||
Gain from sale of real estate, net | $ 10,600 | ||||
Real Estate Acquisitions Expected in 2019 | Self storage under construction | |||||
Self-storage facilities | |||||
Number of facilities under contract | facility | 7 | ||||
Development costs | $ 136,400 | ||||
Expected construction cost | $ 188,600 | ||||
Self-storage facilities | |||||
Self-storage facilities | |||||
Number of self-storage facilities acquired | 1 | 10 | |||
Aggregate purchase price | $ 22,000 | $ 227,500 | |||
Texas | |||||
Self-storage facilities | |||||
Cash paid for acquisition | $ 200 | ||||
OP units issued (in shares) | shares | 168,011 | ||||
Issuance of OP Shares | $ 4,800 | ||||
Total consideration | 12,200 | ||||
Cash paid for acquisition of remaining interest in real estate ventures | $ 200 | ||||
New York | Real Estate Acquisitions Expected in 2019 | Self storage under construction | |||||
Self-storage facilities | |||||
Number of facilities under contract | facility | 3 | ||||
Massachusetts | Self storage under construction | PSI | |||||
Self-storage facilities | |||||
Number of facilities under contract | facility | 2 | ||||
Massachusetts | Real Estate Acquisitions Expected in 2019 | Self storage under construction | |||||
Self-storage facilities | |||||
Number of facilities under contract | facility | (2) |
INVESTMENT IN UNCONSOLIDATED _3
INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURE (Details) $ in Thousands | Sep. 05, 2018USD ($)facility | Aug. 15, 2018USD ($) | May 16, 2018USD ($) | Jan. 31, 2018USD ($) | Nov. 01, 2017USD ($) | Oct. 16, 2017USD ($) | Dec. 15, 2016USD ($)facility | Jun. 15, 2016USD ($)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 | Sep. 30, 2018 | Mar. 31, 2019USD ($)facility | Mar. 31, 2018USD ($)facility | Dec. 31, 2015USD ($)facility | Dec. 31, 2018USD ($) | Mar. 31, 2016USD ($)facility |
Investment in Unconsolidated Real Estate Venture | ||||||||||||||||||||
Investment in real estate entities | $ 94,092 | $ 95,796 | ||||||||||||||||||
Acquisitions of storage facilities | 25,097 | $ 4,034 | ||||||||||||||||||
Summary of results of operations of the real estate venture | ||||||||||||||||||||
Company’s share of net income (loss) | 261 | (184) | ||||||||||||||||||
HVP and HHF | ||||||||||||||||||||
Assets | ||||||||||||||||||||
Storage facilities, net | 733,440 | 741,209 | ||||||||||||||||||
Other assets | 17,321 | 16,042 | ||||||||||||||||||
Total Assets | 750,761 | 757,251 | ||||||||||||||||||
Liabilities and equity | ||||||||||||||||||||
Other liabilities | 9,396 | 7,911 | ||||||||||||||||||
Debt | 413,955 | 413,848 | ||||||||||||||||||
Equity | ||||||||||||||||||||
CubeSmart | 94,092 | 95,796 | ||||||||||||||||||
Joint venture partner | 233,318 | 239,696 | ||||||||||||||||||
Total liabilities and equity | 750,761 | $ 757,251 | ||||||||||||||||||
Summary of results of operations of the real estate venture | ||||||||||||||||||||
Total revenues | 23,203 | 20,910 | ||||||||||||||||||
Operating expenses | 10,163 | 9,204 | ||||||||||||||||||
Other expenses | 142 | 194 | ||||||||||||||||||
Interest expense, net | 4,216 | 2,898 | ||||||||||||||||||
Depreciation and amortization | 9,506 | 9,449 | ||||||||||||||||||
Net income (loss) | (824) | (835) | ||||||||||||||||||
Company’s share of net income (loss) | $ 261 | $ (184) | ||||||||||||||||||
HHFNE | LIBOR | ||||||||||||||||||||
Investment in Unconsolidated Real Estate Venture | ||||||||||||||||||||
Interest rate (as percentage) | 1.90% | |||||||||||||||||||
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 | 12 | 1 | |||||||||||||
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 | $ 129,400 | $ 2,700 | |||||||||||||
Number of properties to be acquired under the contract | facility | 11 | 37 | 31 | |||||||||||||||||
Contract amount to purchase real estate | $ 242,500 | $ 115,500 | ||||||||||||||||||
Intangible value of the in-place leases | $ 18,900 | |||||||||||||||||||
Assumed mortgage debt, at fair value | 25,300 | |||||||||||||||||||
Outstanding principal balance of mortgage debt assumed on acquisitions | 23,700 | |||||||||||||||||||
Premium on debt assumed on acquisitions | $ 1,600 | |||||||||||||||||||
Interest on real estate venture debt | 1.70% | |||||||||||||||||||
Principal amount of debt | $ 107,000 | |||||||||||||||||||
Proceeds from debt | $ 24,400 | $ 43,700 | ||||||||||||||||||
Percentage of capital that is required to be contributed to fund the acquisition | 50.00% | |||||||||||||||||||
HVP | Affiliated Real Estate Investment Transactions | ||||||||||||||||||||
Investment in Unconsolidated Real Estate Venture | ||||||||||||||||||||
Number of properties to be acquired under the contract | facility | 4 | |||||||||||||||||||
Capital Storage Partners, LLC | ||||||||||||||||||||
Investment in Unconsolidated Real Estate Venture | ||||||||||||||||||||
Number of self-storage facilities acquired | facility | 22 | |||||||||||||||||||
Arizona | HVP | ||||||||||||||||||||
Investment in Unconsolidated Real Estate Venture | ||||||||||||||||||||
Number of self-storage facilities acquired | facility | 2 | |||||||||||||||||||
Maryland | HVP | ||||||||||||||||||||
Investment in Unconsolidated Real Estate Venture | ||||||||||||||||||||
Number of self-storage facilities acquired | facility | 1 | |||||||||||||||||||
Michigan | HVP | ||||||||||||||||||||
Investment in Unconsolidated Real Estate Venture | ||||||||||||||||||||
Number of properties to be acquired under the contract | facility | 17 | |||||||||||||||||||
Connecticut | HHFNE | ||||||||||||||||||||
Investment in Unconsolidated Real Estate Venture | ||||||||||||||||||||
Number of self-storage facilities acquired | facility | 3 | |||||||||||||||||||
Massachusetts | HHFNE | ||||||||||||||||||||
Investment in Unconsolidated Real Estate Venture | ||||||||||||||||||||
Number of self-storage facilities acquired | facility | 6 | |||||||||||||||||||
Massachusetts | HVP | ||||||||||||||||||||
Investment in Unconsolidated Real Estate Venture | ||||||||||||||||||||
Number of properties to be acquired under the contract | facility | 7 | |||||||||||||||||||
Rhode Island | HHFNE | ||||||||||||||||||||
Investment in Unconsolidated Real Estate Venture | ||||||||||||||||||||
Number of self-storage facilities acquired | facility | 2 | |||||||||||||||||||
Vermont | HHFNE | ||||||||||||||||||||
Investment in Unconsolidated Real Estate Venture | ||||||||||||||||||||
Number of self-storage facilities acquired | facility | 2 | |||||||||||||||||||
Florida | HVP | ||||||||||||||||||||
Investment in Unconsolidated Real Estate Venture | ||||||||||||||||||||
Number of self-storage facilities acquired | facility | (3) | |||||||||||||||||||
Number of properties to be acquired under the contract | facility | 3 | |||||||||||||||||||
Florida | Capital Storage Partners, LLC | ||||||||||||||||||||
Investment in Unconsolidated Real Estate Venture | ||||||||||||||||||||
Number of self-storage facilities acquired | facility | 4 | |||||||||||||||||||
Texas | ||||||||||||||||||||
Investment in Unconsolidated Real Estate Venture | ||||||||||||||||||||
Acquisitions of storage facilities | $ 9,400 | |||||||||||||||||||
Cash paid for acquisition of remaining interest in real estate ventures | $ 200 | |||||||||||||||||||
Texas | HVP | ||||||||||||||||||||
Investment in Unconsolidated Real Estate Venture | ||||||||||||||||||||
Ownership interest in partnership (as a percent) | 20.00% | |||||||||||||||||||
Number of self-storage facilities acquired | facility | 2 | |||||||||||||||||||
Texas | Capital Storage Partners, LLC | ||||||||||||||||||||
Investment in Unconsolidated Real Estate Venture | ||||||||||||||||||||
Number of self-storage facilities acquired | facility | 13 | |||||||||||||||||||
Oklahoma | Capital Storage Partners, LLC | ||||||||||||||||||||
Investment in Unconsolidated Real Estate Venture | ||||||||||||||||||||
Number of self-storage facilities acquired | facility | 5 | |||||||||||||||||||
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 self-storage facilities acquired | facility | (2) | |||||||||||||||||||
Number of properties to be acquired under the contract | facility | 5 | |||||||||||||||||||
HHFNE | ||||||||||||||||||||
Investment in Unconsolidated Real Estate Venture | ||||||||||||||||||||
Ownership interest in partnership (as a percent) | 10.00% | |||||||||||||||||||
Number of self-storage facilities acquired | facility | 13 | |||||||||||||||||||
Acquisitions of storage facilities | $ 87,500 | |||||||||||||||||||
Intangible value of the in-place leases | 6,000 | |||||||||||||||||||
Investment in joint venture | 3,800 | |||||||||||||||||||
Payment to acquire ownership interest in joint venture | $ 44,500 | |||||||||||||||||||
HVP | ||||||||||||||||||||
Investment in Unconsolidated Real Estate Venture | ||||||||||||||||||||
Investment in real estate entities | $ 16,100 | |||||||||||||||||||
Payment made for acquisition of interest in real estate ventures | $ 14,100 | |||||||||||||||||||
Intangible value of the in-place leases | $ 10,600 | |||||||||||||||||||
Investment in joint venture | 5,400 | $ 10,700 | ||||||||||||||||||
Payment to acquire ownership interest in joint venture | 63,500 | 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% | |||||||||||||||||||
HVP | HVP | ||||||||||||||||||||
Investment in Unconsolidated Real Estate Venture | ||||||||||||||||||||
Proceeds from venture related to real estate contribution | $ 7,500 | |||||||||||||||||||
HVP | Tennessee | ||||||||||||||||||||
Investment in Unconsolidated Real Estate Venture | ||||||||||||||||||||
Number of properties to be acquired under the contract | facility | 10 | |||||||||||||||||||
HVP | Texas | ||||||||||||||||||||
Investment in Unconsolidated Real Estate Venture | ||||||||||||||||||||
Contribution of storage property to real estate venture | $ 9,400 | |||||||||||||||||||
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 | |||||||||||||||||||
Capital Storage Partners, LLC | ||||||||||||||||||||
Investment in Unconsolidated Real Estate Venture | ||||||||||||||||||||
Ownership interest in partnership (as a percent) | 100.00% | |||||||||||||||||||
Investment in joint venture | $ 5,000 | |||||||||||||||||||
Series A Preferred shares, percentage | 11.00% |
UNSECURED SENIOR NOTES (Details
UNSECURED SENIOR NOTES (Details) $ in Thousands | Apr. 04, 2017USD ($) | Oct. 26, 2015USD ($) | Dec. 17, 2013USD ($) | Mar. 31, 2019USD ($) | Jan. 31, 2019USD ($) | Dec. 31, 2018USD ($) |
Mortgage loans and Notes payable | ||||||
Less: Loan procurement costs, net | $ (793) | $ (963) | ||||
Total unsecured senior notes, net | 1,488,692 | 1,143,524 | ||||
Cubesmart, L P and Subsidiaries | ||||||
Mortgage loans and Notes payable | ||||||
Less: Loan procurement costs, net | (793) | (963) | ||||
Total unsecured senior notes, net | 1,488,692 | 1,143,524 | ||||
Senior Notes | ||||||
Mortgage loans and Notes payable | ||||||
Carrying value | 1,500,000 | 1,150,000 | ||||
Less: Discount on issuance of notes, net | (2,773) | (568) | ||||
Less: Loan procurement costs, net | (8,535) | (5,908) | ||||
Total unsecured senior notes, net | $ 1,488,692 | 1,143,524 | ||||
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 4.800% due 2022 | ||||||
Mortgage loans and Notes payable | ||||||
Senior notes, principal amount | $ 250,000 | |||||
Interest rate (as a percent) | 4.80% | |||||
Carrying value | $ 250,000 | 250,000 | ||||
Effective interest rate (as a percent) | 4.82% | |||||
Senior notes 4.375% due 2023 | ||||||
Mortgage loans and Notes payable | ||||||
Senior notes, principal amount | $ 300,000 | |||||
Interest rate (as a percent) | 4.375% | 4.375% | 4.375% | |||
Carrying value | $ 300,000 | 300,000 | ||||
Effective interest rate (as a percent) | 3.495% | 4.501% | 4.33% | |||
Effective weighted average interest rate (as a percent) | 4.33% | |||||
Proceeds from senior notes | $ 50,000 | $ 250,000 | ||||
Debt instrument, redemption percentage | 105.04% | 98.995% | ||||
Senior notes 4.000% due 2025 | ||||||
Mortgage loans and Notes payable | ||||||
Senior notes, principal amount | $ 300,000 | |||||
Interest rate (as a percent) | 4.00% | 4.00% | 4.00% | |||
Carrying value | $ 300,000 | 300,000 | ||||
Effective interest rate (as a percent) | 3.811% | 4.032% | 3.99% | |||
Effective weighted average interest rate (as a percent) | 3.994% | |||||
Proceeds from senior notes | $ 50,000 | $ 250,000 | ||||
Debt instrument, redemption percentage | 101.343% | 99.735% | ||||
Senior Notes 3.125% Due 2026 | ||||||
Mortgage loans and Notes payable | ||||||
Senior notes, principal amount | $ 300,000 | |||||
Interest rate (as a percent) | 3.125% | |||||
Carrying value | $ 300,000 | 300,000 | ||||
Effective interest rate (as a percent) | 3.18% | |||||
Senior Notes 4.375 % Due 2029 | ||||||
Mortgage loans and Notes payable | ||||||
Senior notes, principal amount | $ 350,000 | |||||
Interest rate (as a percent) | 4.375% | |||||
Carrying value | $ 350,000 | |||||
Effective interest rate (as a percent) | 4.46% | |||||
Credit Facility | ||||||
Mortgage loans and Notes payable | ||||||
Less: Loan procurement costs, net | $ (139) | $ (201) | ||||
Effective weighted average interest rate (as a percent) | 3.69% |
REVOLVING CREDIT FACILITY AND_3
REVOLVING CREDIT FACILITY AND UNSECURED TERM LOANS (Details) | Apr. 04, 2017USD ($) | Oct. 26, 2015USD ($) | Dec. 17, 2013USD ($) | Jun. 20, 2011USD ($) | Mar. 31, 2019USD ($) | Jan. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Apr. 22, 2015USD ($) |
SECURED CREDIT FACILITY, UNSECURED CREDIT FACILITY AND SECURED TERM LOANS | ||||||||
Loan procurement costs, net of amortization | $ 793,000 | $ 963,000 | ||||||
Unsecured term loan | 99,861,000 | 299,799,000 | ||||||
Less: Loan procurement costs, net | (793,000) | (963,000) | ||||||
Term Loan B | ||||||||
SECURED CREDIT FACILITY, UNSECURED CREDIT FACILITY AND SECURED TERM LOANS | ||||||||
Unsecured term loan | $ 100,000,000 | 100,000,000 | ||||||
Effective interest rate (as a percent) | 3.64% | |||||||
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 | ||||||||
Variable interest rate basis | LIBOR | |||||||
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% | |||||||
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 | |||||||
Variable interest rate basis | LIBOR | |||||||
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% | |||||||
Credit Facility | ||||||||
SECURED CREDIT FACILITY, UNSECURED CREDIT FACILITY AND SECURED TERM LOANS | ||||||||
Loan procurement costs, net of amortization | $ 139,000 | 201,000 | ||||||
Unsecured term loan | 100,000,000 | 300,000,000 | ||||||
Less: Loan procurement costs, net | (139,000) | (201,000) | ||||||
Total unsecured term loans, net | $ 99,861,000 | 299,799,000 | ||||||
Effective weighted average interest rate (as a percent) | 3.69% | |||||||
Tangible net worth | $ 821,211,200 | |||||||
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 | |||||||
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 | |||||||
Interest rate, basis spread (as a percent) | 1.25% | |||||||
Facility fee (as a percent) | 0.15% | |||||||
Remaining borrowing capacity | $ 403,200,000 | |||||||
Outstanding letter of credit | 700,000 | |||||||
Credit Facility | Unsecured term loan | ||||||||
SECURED CREDIT FACILITY, UNSECURED CREDIT FACILITY AND SECURED TERM LOANS | ||||||||
Debt amount | $ 200,000,000 | |||||||
Unsecured term loan | $ 200,000,000 | |||||||
Senior notes 4.375% due 2023 | ||||||||
SECURED CREDIT FACILITY, UNSECURED CREDIT FACILITY AND SECURED TERM LOANS | ||||||||
Debt amount | $ 300,000,000 | |||||||
Proceeds from senior notes | $ 50,000,000 | $ 250,000,000 | ||||||
Interest rate (as a percent) | 4.375% | 4.375% | 4.375% | |||||
Effective interest rate (as a percent) | 3.495% | 4.501% | 4.33% | |||||
Effective weighted average interest rate (as a percent) | 4.33% | |||||||
Senior notes 4.000% due 2025 | ||||||||
SECURED CREDIT FACILITY, UNSECURED CREDIT FACILITY AND SECURED TERM LOANS | ||||||||
Debt amount | $ 300,000,000 | |||||||
Proceeds from senior notes | $ 50,000,000 | $ 250,000,000 | ||||||
Interest rate (as a percent) | 4.00% | 4.00% | 4.00% | |||||
Effective interest rate (as a percent) | 3.811% | 4.032% | 3.99% | |||||
Effective weighted average interest rate (as a percent) | 3.994% | |||||||
Senior Notes 4.375 % Due 2029 | ||||||||
SECURED CREDIT FACILITY, UNSECURED CREDIT FACILITY AND SECURED TERM LOANS | ||||||||
Debt amount | $ 350,000,000 | |||||||
Interest rate (as a percent) | 4.375% | |||||||
Effective interest rate (as a percent) | 4.46% |
MORTGAGE LOANS AND NOTES PAYA_3
MORTGAGE LOANS AND NOTES PAYABLE - Summary (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Mortgage loans and Notes payable | ||
Less: Loan procurement costs, net | $ (793) | $ (963) |
Total mortgage loans and notes payable | 107,414 | 108,246 |
Net book value of self-storage facilities | 3,604,791 | 3,600,968 |
Mortgages | ||
Mortgage loans and Notes payable | ||
Carrying value | 105,445 | 106,146 |
Plus: Unamortized fair value adjustment | 2,372 | 2,551 |
Less: Loan procurement costs, net | (403) | (451) |
Total mortgage loans and notes payable | 107,414 | 108,246 |
Net book value of self-storage facilities | 229,600 | 231,000 |
YSI 33 | ||
Mortgage loans and Notes payable | ||
Carrying value | $ 9,126 | 9,214 |
Effective interest rate (as a percent) | 6.42% | |
YSI 26 | ||
Mortgage loans and Notes payable | ||
Carrying value | $ 7,967 | 8,022 |
Effective interest rate (as a percent) | 4.56% | |
YSI 57 | ||
Mortgage loans and Notes payable | ||
Carrying value | $ 2,797 | 2,816 |
Effective interest rate (as a percent) | 4.61% | |
YSI 55 | ||
Mortgage loans and Notes payable | ||
Carrying value | $ 21,916 | 22,041 |
Effective interest rate (as a percent) | 4.85% | |
YSI 24 | ||
Mortgage loans and Notes payable | ||
Carrying value | $ 24,680 | 24,893 |
Effective interest rate (as a percent) | 4.64% | |
YSI 65 | ||
Mortgage loans and Notes payable | ||
Carrying value | $ 2,351 | 2,363 |
Effective interest rate (as a percent) | 3.85% | |
YSI 66 | ||
Mortgage loans and Notes payable | ||
Carrying value | $ 31,023 | 31,171 |
Effective interest rate (as a percent) | 3.51% | |
YSI 68 | ||
Mortgage loans and Notes payable | ||
Carrying value | $ 5,585 | $ 5,626 |
Effective interest rate (as a percent) | 3.78% |
MORTGAGE LOANS AND NOTES PAYA_4
MORTGAGE LOANS AND NOTES PAYABLE - Future Payments (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Future principal payment requirements on the outstanding mortgage loans and notes payable at year end | ||
Less: Loan procurement costs, net | $ (793) | $ (963) |
Total mortgage loans and notes payable, net | 107,414 | 108,246 |
Mortgages | ||
Future principal payment requirements on the outstanding mortgage loans and notes payable at year end | ||
2019 | 10,951 | |
2020 | 12,791 | |
2021 | 45,057 | |
2022 | 923 | |
2023 | 31,019 | |
2024 and thereafter | 4,704 | |
Total mortgage payments | 105,445 | 106,146 |
Plus: Unamortized fair value adjustment | 2,372 | 2,551 |
Less: Loan procurement costs, net | (403) | (451) |
Total mortgage loans and notes payable, net | $ 107,414 | $ 108,246 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Changes in accumulated other comprehensive income by component | |
Beginning balance | $ (1,029) |
Ending balance | (789) |
Unrealized losses on interest rate swaps | |
Changes in accumulated other comprehensive income by component | |
Beginning balance | (1,029) |
Other comprehensive gain before reclassifications | 230 |
Amounts reclassified from accumulated other comprehensive loss | 10 |
Net current-period other comprehensive income | 240 |
Ending balance | $ (789) |
RISK MANAGEMENT AND USE OF FI_3
RISK MANAGEMENT AND USE OF FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands | Jan. 24, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Derivative financial instruments | |||
Fair Value | $ 0 | ||
Settlement of hedge transactions | 807 | ||
Realized losses reclassified from accumulated other comprehensive loss | 10 | ||
Amount estimated to be reclassified as an increase to interest expense | $ 100 | ||
Designated | Cash flow | Interest rate swap | |||
Derivative financial instruments | |||
Notional Amount | $ 150,000 | ||
Fair Value | (1,039) | ||
Settlement of hedge transactions | $ 800 | ||
Designated | Cash flow | Hedge Product, Swap one | |||
Derivative financial instruments | |||
Notional Amount | 75,000 | ||
Swap, Strike rate (as a percent) | 2.8015% | ||
Fair Value | (516) | ||
Designated | Cash flow | Hedge Product, Swap two | |||
Derivative financial instruments | |||
Notional Amount | 50,000 | ||
Swap, Strike rate (as a percent) | 2.803% | ||
Fair Value | (350) | ||
Designated | Cash flow | Hedge Product, Swap three | |||
Derivative financial instruments | |||
Notional Amount | 25,000 | ||
Swap, Strike rate (as a percent) | 2.802% | ||
Fair Value | $ (173) |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019USD ($)item | Dec. 31, 2018USD ($) | |
Fair value of financial assets and liabilities carried at fair value | ||
Derivative Assets | $ 0 | |
Derivative Liabilities | 0 | |
Aggregate carrying value of total debt | $ 1,800,000 | $ 1,700,000 |
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 2017 | item | 0 | |
Level 2 | ||
Fair value of financial assets and liabilities carried at fair value | ||
Total liabilities at fair value | 1,039 | |
Level 2 | Interest rate swap | ||
Fair value of financial assets and liabilities carried at fair value | ||
Derivative Liabilities | $ 1,039 |
NONCONTROLLING INTERESTS - Inte
NONCONTROLLING INTERESTS - Interests in Consolidated Real Estate Joint Ventures (Details) $ in Thousands | Mar. 07, 2019USD ($) | Mar. 31, 2019USD ($)facility | Mar. 31, 2018USD ($) | Dec. 31, 2018USD ($) |
Interests in Consolidated Real Estate Joint Ventures | ||||
Acquisition of noncontrolling interest | $ 10,000 | $ 300 | ||
Noncontrolling interests in subsidiaries | 11,191 | $ 6,771 | ||
Reduction to additional paid in capital | 4,828 | $ 738 | ||
CS SJM E 92nd Street LLC | ||||
Interests in Consolidated Real Estate Joint Ventures | ||||
Assumed mortgage debt, at fair value | 1,500 | |||
Outstanding principal balance of mortgage debt assumed on acquisitions | 6,900 | |||
CS SDP Newtonville LLC | ||||
Interests in Consolidated Real Estate Joint Ventures | ||||
Assumed mortgage debt, at fair value | 700 | |||
Outstanding principal balance of mortgage debt assumed on acquisitions | 12,100 | |||
CS 1158 McDonald Ave LLC | ||||
Interests in Consolidated Real Estate Joint Ventures | ||||
Option to call ownership interest of another member | 10,000 | |||
Accretion liability | 7,800 | |||
CS 160 East 22nd Street LLC | ||||
Interests in Consolidated Real Estate Joint Ventures | ||||
Option to call ownership interest of another member | 11,500 | |||
Accretion liability | 10,700 | |||
CS SDP Waltham LLC | ||||
Interests in Consolidated Real Estate Joint Ventures | ||||
Assumed mortgage debt, at fair value | 9,000 | |||
Outstanding principal balance of mortgage debt assumed on acquisitions | 10,800 | |||
2225 46th Street LLC | ||||
Interests in Consolidated Real Estate Joint Ventures | ||||
Option to call ownership interest of another member | 15,200 | |||
Accretion liability | 15,200 | |||
186 Jamaica Ave LLC | ||||
Interests in Consolidated Real Estate Joint Ventures | ||||
Assumed mortgage debt, at fair value | 12,400 | |||
Outstanding principal balance of mortgage debt assumed on acquisitions | $ 12,800 | |||
Shirlington Rd LLC | ||||
Interests in Consolidated Real Estate Joint Ventures | ||||
Acquisition of noncontrolling interest | $ 10,000 | |||
Noncontrolling interests in subsidiaries | 0 | |||
Reduction to additional paid in capital | 9,700 | |||
Amount of debt repaid | 12,200 | |||
VIE | ||||
Interests in Consolidated Real Estate Joint Ventures | ||||
Number of self-storage facilities owned and operated | facility | 10 | |||
Total assets | $ 264,925 | |||
Total liabilities | $ 113,267 | |||
Period of option to call ownership interest of another member | 1 year | |||
Period of option to put ownership interest in venture | 1 year | |||
Payment made for acquisition of interest in real estate ventures | $ 4,800 | |||
VIE | Shirlington Rd II 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 | $ 8,194 | |||
Total liabilities | $ 4 | |||
Percentage of interest acquired | 10.00% | |||
VIE | CS SJM E 92nd Street 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 | $ 15,956 | |||
Total liabilities | $ 14,785 | |||
VIE | CS SDP Newtonville 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 | $ 7,327 | |||
Total liabilities | $ 799 | |||
VIE | CS 1158 McDonald 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 | $ 32,905 | |||
Total liabilities | 8,770 | |||
Option to put ownership interest in the venture | $ 10,000 | |||
VIE | CS 160 East 22nd Street 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 | $ 28,787 | |||
Total liabilities | 16,809 | |||
Option to put ownership interest in the venture | $ 11,500 | |||
VIE | CS SDP Waltham 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 | $ 16,276 | |||
Total liabilities | $ 10,540 | |||
VIE | 2225 46th Street 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 | $ 45,328 | |||
Total liabilities | 16,119 | |||
Option to put ownership interest in the venture | $ 15,200 | |||
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 | $ 77,882 | |||
Total liabilities | 32,712 | |||
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 | 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 | $ 17,312 | |||
Total liabilities | $ 12,508 | |||
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 | $ 14,958 | |||
Total liabilities | $ 221 | |||
Percentage of interest acquired | 10.00% |
NONCONTROLLING INTERESTS - Oper
NONCONTROLLING INTERESTS - Operating Partnership Ownership (Details) - USD ($) $ in Thousands | Jan. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 |
Operating Partnership Ownership | ||||
OP Units outstanding which are not owned by the general partner (as a percent) | 1.00% | 1.00% | ||
Adjustment for noncontrolling interest in the Operating Partnership | $ (6,681) | $ 1,169 | ||
Texas | ||||
Operating Partnership Ownership | ||||
OP units issued (in shares) | 168,011 | |||
Issuance of OP Shares | $ 4,800 | |||
Total consideration | 12,200 | |||
Cash paid for acquisition | 200 | |||
Amount of mortgage loan commitment | $ 7,200 | |||
Cubesmart, L P and Subsidiaries | ||||
Operating Partnership Ownership | ||||
OP units outstanding (in shares) | 1,885,570 | 1,945,570 | ||
Number of trading days used to determine average of the closing prices of the shares | 10 days | |||
Adjustment for noncontrolling interest in the Operating Partnership | $ (6,681) | $ 1,169 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
LEASES | |
Lessor, Administrative and late fees income | $ 5,400 |
Operating Lease, Income, Comprehensive Income [Extensible List] | cube:OtherpropertyRelatedIncomeMember |
Lessee, Operating Lease, Existence of Option to Extend [true false] | true |
Lessee, Operating Lease, Existence of Option to Terminate [true false] | true |
Operating lease right of use assets | $ 55,500 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | us-gaap:OtherAssetsMember |
Operating lease liabilities | $ 60,693 |
Operating Lease, Liability, Statement of Financial Position [Extensible List] | us-gaap:AccountsPayableAndAccruedLiabilitiesMember |
Operating lease weighted-average remaining lease term (in years) | 34 years 4 months 24 days |
Operating lease weighted-average discount rate | 4.70% |
Operating lease amount paid | $ 700 |
Minimum | |
LEASES | |
Operating lease term (in years) | 1 year |
Operating lease renewal term (in years) | 1 year |
Maximum | |
LEASES | |
Operating lease term (in years) | 45 years |
Operating lease renewal term (in years) | 69 years |
LEASES - Lease Cost (Details)
LEASES - Lease Cost (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
LEASES | |
Operating lease cost | $ 980 |
Short-term lease cost | 296 |
Total lease cost | $ 1,276 |
LEASES - Future Operating Lease
LEASES - Future Operating Lease Liability Maturities (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Future operating lease liability maturities | |
2019 | $ 2,199 |
2020 | 2,936 |
2021 | 3,008 |
2022 | 3,180 |
2023 | 3,258 |
2024 and thereafter | 116,429 |
Total operating lease payments | 131,010 |
Less: Imputed interest | (70,317) |
Present value of operating lease liabilities | $ 60,693 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Insurance Recoveries (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($) | |
State Specific Deceptive and Unfair Trade Practices Act [Member] | |
Commitments and contingencies line items | |
Loss contingency provision | $ 1.8 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - Joint ventures related to affiliated real estate investments - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
RELATED PARTY TRANSACTIONS | |||
Management fees | $ 1.2 | $ 1 | |
Amounts due to the Company from related parties | 12.8 | $ 10.6 | |
Mortgage loans receivable from consolidated joint ventures | $ 23.6 | $ 33.2 | |
Ventures | |||
RELATED PARTY TRANSACTIONS | |||
Acquisition fee (as a percent) | 0.50% | ||
Acquisition fees | $ 0 | $ 0.3 |
PRO FORMA FINANCIAL INFORMATI_3
PRO FORMA FINANCIAL INFORMATION (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019USD ($)facility$ / shares | Mar. 31, 2018USD ($)$ / shares | Dec. 31, 2018USD ($)property | |
Consolidated results of operations on a pro forma basis | |||
Pro forma revenue | $ | $ 153,058 | $ 146,368 | |
Pro forma income | $ | $ 38,635 | $ 36,303 | |
Earnings per share from continuing operations: | |||
Basic - as reported (in dollars per share) | $ 0.19 | $ 0.19 | |
Diluted - as reported (in dollars per share) | 0.19 | 0.19 | |
Basic - as pro forma (in dollars per share) | 0.20 | 0.20 | |
Diluted - as pro forma (in dollars per share) | $ 0.20 | $ 0.20 | |
Self-storage facilities | |||
Self-storage facilities | |||
Number of self-storage facilities acquired | 1 | 10 | |
Aggregate purchase price | $ | $ 22,000 | $ 227,500 |
CONSOLIDATED BALANCE SHEETS (LP
CONSOLIDATED BALANCE SHEETS (LP cube) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
ASSETS | ||
Storage properties | $ 4,489,732 | $ 4,463,455 |
Less: Accumulated depreciation | (884,941) | (862,487) |
Storage properties, net (including VIE assets of $248,805 and $330,986, respectively) | 3,604,791 | 3,600,968 |
Cash and cash equivalents | 3,533 | 3,764 |
Restricted cash | 3,008 | 2,718 |
Loan procurement costs, net of amortization | 793 | 963 |
Investment in real estate venture, at equity | 94,092 | 95,796 |
Other assets, net | 107,972 | 48,763 |
Total assets | 3,814,189 | 3,752,972 |
LIABILITIES AND CAPITAL | ||
Unsecured senior notes, net | 1,488,692 | 1,143,524 |
Revolving credit facility | 96,145 | 195,525 |
Unsecured term loan | 99,861 | 299,799 |
Mortgage loans and notes payable, net | 107,414 | 108,246 |
Accounts payable, accrued expenses and other liabilities | 168,174 | 149,914 |
Distributions payable | 60,978 | 60,627 |
Deferred revenue | 23,485 | 22,595 |
Security deposits | 466 | 474 |
Total liabilities | 2,045,215 | 1,980,704 |
Limited Partnership interests of third parties | 60,414 | 55,819 |
Commitments and contingencies | ||
Capital | ||
Accumulated other comprehensive loss | (789) | (1,029) |
Total liabilities and equity | 3,814,189 | 3,752,972 |
Cubesmart, L P and Subsidiaries | ||
ASSETS | ||
Storage properties | 4,489,732 | 4,463,455 |
Less: Accumulated depreciation | (884,941) | (862,487) |
Storage properties, net (including VIE assets of $248,805 and $330,986, respectively) | 3,604,791 | 3,600,968 |
Cash and cash equivalents | 3,533 | 3,764 |
Restricted cash | 3,008 | 2,718 |
Loan procurement costs, net of amortization | 793 | 963 |
Investment in real estate venture, at equity | 94,092 | 95,796 |
Other assets, net | 107,972 | 48,763 |
Total assets | 3,814,189 | 3,752,972 |
LIABILITIES AND CAPITAL | ||
Unsecured senior notes, net | 1,488,692 | 1,143,524 |
Revolving credit facility | 96,145 | 195,525 |
Unsecured term loan | 99,861 | 299,799 |
Mortgage loans and notes payable, net | 107,414 | 108,246 |
Accounts payable, accrued expenses and other liabilities | 168,174 | 149,914 |
Distributions payable | 60,978 | 60,627 |
Deferred revenue | 23,485 | 22,595 |
Security deposits | 466 | 474 |
Total liabilities | 2,045,215 | 1,980,704 |
Limited Partnership interests of third parties | 60,414 | 55,819 |
Capital | ||
Operating Partner | 1,698,158 | 1,710,707 |
Accumulated other comprehensive loss | (789) | (1,029) |
Total CubeSmart, L.P. capital | 1,697,369 | 1,709,678 |
Noncontrolling interests in subsidiaries | 11,191 | 6,771 |
Total capital | 1,708,560 | 1,716,449 |
Total liabilities and equity | $ 3,814,189 | $ 3,752,972 |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (Parenthetical) (LP cube) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Storage facilities, net | $ 3,604,791 | $ 3,600,968 |
VIE | ||
Storage facilities, net | 248,805 | 330,986 |
Cubesmart, L P and Subsidiaries | ||
Storage facilities, net | 3,604,791 | 3,600,968 |
Cubesmart, L P and Subsidiaries | VIE | ||
Storage facilities, net | $ 248,805 | $ 330,986 |
CONSOLIDATED STATEMENTS OF OP_2
CONSOLIDATED STATEMENTS OF OPERATIONS (LP cube) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
REVENUES | ||
Rental income | $ 131,592 | $ 124,161 |
Total revenues | 152,845 | 142,877 |
OPERATING EXPENSES | ||
Property operating expenses | 51,425 | 48,754 |
Depreciation and amortization | 38,442 | 34,966 |
General and administrative | 9,147 | 8,744 |
Total operating expenses | 99,014 | 92,464 |
Interest: | ||
Interest expense on loans | (17,517) | (15,155) |
Loan procurement amortization expense | (624) | (579) |
Equity in earnings (losses) of real estate ventures | 261 | (184) |
Other | (165) | 304 |
Total other expense | (18,045) | (15,614) |
NET INCOME | 35,786 | 34,799 |
NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS | ||
Noncontrolling interest in subsidiaries | 70 | 7 |
Operating Partnership interests of third parties | (358) | (383) |
NET INCOME ATTRIBUTABLE TO THE COMPANY'S COMMON SHAREHOLDERS | $ 35,498 | $ 34,423 |
Diluted earnings per share attributable to common shareholders (in dollars per share) | $ 0.19 | $ 0.19 |
Weighted-average basic units outstanding (in units) | 187,253 | 182,274 |
Weighted-average diluted units outstanding (in units) | 187,984 | 183,222 |
Other Property Related Income | ||
REVENUES | ||
Property related income | $ 15,675 | $ 14,247 |
Property Management Fee Income | ||
REVENUES | ||
Property related income | 5,578 | 4,469 |
Cubesmart, L P and Subsidiaries | ||
REVENUES | ||
Rental income | 131,592 | 124,161 |
Total revenues | 152,845 | 142,877 |
OPERATING EXPENSES | ||
Property operating expenses | 51,425 | 48,754 |
Depreciation and amortization | 38,442 | 34,966 |
General and administrative | 9,147 | 8,744 |
Total operating expenses | 99,014 | 92,464 |
Interest: | ||
Interest expense on loans | (17,517) | (15,155) |
Loan procurement amortization expense | (624) | (579) |
Equity in earnings (losses) of real estate ventures | 261 | (184) |
Other | (165) | 304 |
Total other expense | (18,045) | (15,614) |
NET INCOME | 35,786 | 34,799 |
NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS | ||
Noncontrolling interest in subsidiaries | 70 | 7 |
NET INCOME ATTRIBUTABLE TO CUBESMART L.P. | 35,856 | 34,806 |
Operating Partnership interests of third parties | (358) | (383) |
NET INCOME ATTRIBUTABLE TO THE COMPANY'S COMMON SHAREHOLDERS | $ 35,498 | $ 34,423 |
Basic earnings per unit attributable to common unitholders | $ 0.19 | $ 0.19 |
Diluted earnings per share attributable to common shareholders (in dollars per share) | $ 0.19 | $ 0.19 |
Weighted-average basic units outstanding (in units) | 187,253 | 182,274 |
Weighted-average diluted units outstanding (in units) | 187,984 | 183,222 |
Cubesmart, L P and Subsidiaries | Other Property Related Income | ||
REVENUES | ||
Property related income | $ 15,675 | $ 14,247 |
Cubesmart, L P and Subsidiaries | Property Management Fee Income | ||
REVENUES | ||
Property related income | $ 5,578 | $ 4,469 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (LP cube) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
NET INCOME | $ 35,786 | $ 34,799 |
Other comprehensive income: | ||
Unrealized gains on interest rate swaps | 232 | 60 |
Reclassification of realized losses on interest rate swaps | 10 | 219 |
OTHER COMPREHENSIVE INCOME | 242 | 279 |
COMPREHENSIVE INCOME | 36,028 | 35,078 |
Comprehensive income attributable to Operating Partnership interests of third parties | (360) | (383) |
Comprehensive loss attributable to noncontrolling interests in subsidiaries | 70 | 7 |
COMPREHENSIVE INCOME ATTRIBUTABLE TO THE COMPANY | 35,738 | 34,702 |
Cubesmart, L P and Subsidiaries | ||
NET INCOME | 35,786 | 34,799 |
Other comprehensive income: | ||
Unrealized gains on interest rate swaps | 232 | 60 |
Reclassification of realized losses on interest rate swaps | 10 | 219 |
OTHER COMPREHENSIVE INCOME | 242 | 279 |
COMPREHENSIVE INCOME | 36,028 | 35,078 |
Comprehensive income attributable to Operating Partnership interests of third parties | (360) | (383) |
Comprehensive loss attributable to noncontrolling interests in subsidiaries | 70 | 7 |
COMPREHENSIVE INCOME ATTRIBUTABLE TO THE COMPANY | $ 35,738 | $ 34,702 |
CONSOLIDATED STATEMENTS OF CAPI
CONSOLIDATED STATEMENTS OF CAPITAL (LP cube) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Increase (Decrease) in Partners' Capital | |||
Balance of Noncontrolling Interests in the Operating Partnership | $ 55,819 | ||
Contributions from noncontrolling interests in subsidiaries | 4,828 | $ 738 | |
Distributions to noncontrolling interests in subsidiaries | (66) | ||
Acquisition of noncontrolling interest in subsidiary | (10,000) | $ (300) | |
Adjustment for Operating Partnership interests of third parties | (6,681) | 1,169 | |
Net income (loss) | 35,428 | 34,416 | |
Other comprehensive income, net | 240 | 276 | |
Balance of Noncontrolling Interests in the Operating Partnership | 60,414 | 55,819 | |
Noncontrolling Interests in Operating Partnership | |||
Increase (Decrease) in Partners' Capital | |||
Balance of Noncontrolling Interests in the Operating Partnership | 55,819 | 54,320 | 54,320 |
Issuance of OP units | 4,782 | ||
Adjustment for Operating Partnership interests of third parties | 6,681 | (1,169) | |
Net income (loss) | 358 | 383 | |
Other comprehensive income, net | 2 | 3 | |
Balance of Noncontrolling Interests in the Operating Partnership | 60,414 | 57,705 | 55,819 |
Cubesmart, L P and Subsidiaries | |||
Increase (Decrease) in Partners' Capital | |||
Balance | 1,716,449 | 1,635,370 | 1,635,370 |
Balance of Noncontrolling Interests in the Operating Partnership | 55,819 | ||
Contributions from noncontrolling interests in subsidiaries | 4,828 | 738 | |
Distributions to noncontrolling interests in subsidiaries | (66) | ||
Acquisition of noncontrolling interest in subsidiary | (10,000) | ||
Preferred OP unit redemption | (44) | ||
Issuance of common OP units | 24,580 | ||
Issuance of restricted OP units | 1 | ||
Conversion from OP units to shares | 1,842 | ||
Exercise of OP unit options | 1,049 | 2 | |
Amortization of restricted OP units | 798 | (242) | |
OP unit compensation expense | 468 | 423 | |
Adjustment for Operating Partnership interests of third parties | (6,681) | 1,169 | |
Net income (loss) | 35,428 | 34,416 | |
Other comprehensive income, net | 240 | 276 | |
Common OP unit distributions | (60,375) | (54,780) | |
Balance | 1,708,560 | 1,617,329 | 1,716,449 |
Balance of Noncontrolling Interests in the Operating Partnership | 60,414 | 55,819 | |
Cubesmart, L P and Subsidiaries | Noncontrolling Interests in Operating Partnership | |||
Increase (Decrease) in Partners' Capital | |||
Balance of Noncontrolling Interests in the Operating Partnership | 55,819 | 54,320 | 54,320 |
Issuance of OP units | 4,782 | ||
Conversion from OP units to shares | (1,842) | ||
Adjustment for Operating Partnership interests of third parties | 6,681 | (1,169) | |
Net income (loss) | 358 | 383 | |
Other comprehensive income, net | 2 | 3 | |
Common OP unit distributions | (604) | (614) | |
Balance of Noncontrolling Interests in the Operating Partnership | 60,414 | 57,705 | 55,819 |
Cubesmart, L P and Subsidiaries | Total Shareholders' Equity | |||
Increase (Decrease) in Partners' Capital | |||
Balance | 1,709,678 | 1,629,134 | 1,629,134 |
Acquisition of noncontrolling interest in subsidiary | (9,728) | ||
Preferred OP unit redemption | (44) | ||
Issuance of common OP units | 24,580 | ||
Issuance of restricted OP units | 1 | ||
Conversion from OP units to shares | 1,842 | ||
Exercise of OP unit options | 1,049 | 2 | |
Amortization of restricted OP units | 798 | (242) | |
OP unit compensation expense | 468 | 423 | |
Adjustment for Operating Partnership interests of third parties | (6,681) | 1,169 | |
Net income (loss) | 35,498 | 34,423 | |
Other comprehensive income, net | 240 | 276 | |
Common OP unit distributions | (60,375) | (54,780) | |
Balance | 1,697,369 | 1,610,362 | 1,709,678 |
Cubesmart, L P and Subsidiaries | Operating Partner | |||
Increase (Decrease) in Partners' Capital | |||
Balance | $ 1,710,707 | $ 1,629,131 | $ 1,629,131 |
Balance (in units) | 187,145 | 182,216 | 182,216 |
Acquisition of noncontrolling interest in subsidiary | $ (9,728) | ||
Preferred OP unit redemption | $ (44) | ||
Issuance of common OP units | $ 24,580 | ||
Issuance of common OP units (in units) | 773 | ||
Issuance of restricted OP units | $ 1 | ||
Issuance of restricted OP units (in units) | 19 | 64 | |
Conversion from OP units to shares | $ 1,842 | ||
Conversion from OP units to shares (in units) | 60 | ||
Exercise of OP unit options | $ 1,049 | $ 2 | |
Exercise of OP unit options (in units) | 140 | ||
Amortization of restricted OP units | $ 798 | (242) | |
OP unit compensation expense | 468 | 423 | |
Adjustment for Operating Partnership interests of third parties | (6,681) | 1,169 | |
Net income (loss) | 35,498 | 34,423 | |
Common OP unit distributions | (60,375) | (54,780) | |
Balance | $ 1,698,158 | $ 1,610,083 | $ 1,710,707 |
Balance (in units) | 188,137 | 182,280 | 187,145 |
Cubesmart, L P and Subsidiaries | Accumulated Other Comprehensive (Loss) Income | |||
Increase (Decrease) in Partners' Capital | |||
Balance | $ (1,029) | $ 3 | $ 3 |
Other comprehensive income, net | 240 | 276 | |
Balance | (789) | 279 | (1,029) |
Cubesmart, L P and Subsidiaries | Noncontrolling Interest in Subsidiaries | |||
Increase (Decrease) in Partners' Capital | |||
Balance | 6,771 | 6,236 | 6,236 |
Contributions from noncontrolling interests in subsidiaries | 4,828 | 738 | |
Distributions to noncontrolling interests in subsidiaries | (66) | ||
Acquisition of noncontrolling interest in subsidiary | (272) | ||
Net income (loss) | (70) | (7) | |
Balance | $ 11,191 | $ 6,967 | $ 6,771 |
CONSOLIDATED STATEMENTS OF EQ_3
CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) (LP cube) - $ / shares | Mar. 31, 2019 | Mar. 31, 2018 |
Cubesmart, L P and Subsidiaries | ||
Common OP unit distributions (in dollars per share) | $ 0.32 | $ 0.30 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (LP cube) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Operating Activities | ||
Net income | $ 35,786 | $ 34,799 |
Adjustments to reconcile net income to cash provided by operating activities: | ||
Depreciation and amortization | 39,066 | 35,545 |
Equity in (earnings) losses of real estate ventures | (261) | 184 |
Equity compensation expense | 1,619 | 1,592 |
Accretion of fair market value adjustment of debt | (179) | (183) |
Changes in other operating accounts: | ||
Other assets | (3,212) | (1,352) |
Accounts payable and accrued expenses | 1,806 | (5,558) |
Other liabilities | 833 | 1,105 |
Net cash provided by operating activities | 75,458 | 66,132 |
Investing Activities | ||
Acquisitions of storage facilities | (25,097) | (4,034) |
Additions and improvements to storage facilities | (6,153) | (5,394) |
Development costs | (49,748) | (39,663) |
Investment in real estate ventures | (107) | (10,320) |
Cash distributed from real estate ventures | 2,072 | 2,257 |
Net cash used in investing activities | (79,033) | (57,154) |
Proceeds from: | ||
Unsecured senior notes | 347,746 | |
Revolving credit facility | 279,020 | 156,700 |
Principal payments on: | ||
Revolving credit facility | (378,400) | (102,000) |
Unsecured term loans | (200,000) | |
Mortgage loans and notes payable | (701) | (7,831) |
Loan procurement costs | (2,634) | |
Settlement of hedge transactions | (807) | |
Acquisition of noncontrolling interest in subsidiary | (5,172) | |
Cash paid upon vesting of restricted OP units | (353) | (1,411) |
Contributions from noncontrolling interests in subsidiaries | 738 | |
Distributions paid to noncontrolling interests in subsidiaries | (66) | |
Distributions paid to common OP unitholders | (60,005) | (54,746) |
Net cash provided by (used in) financing activities | 3,634 | (9,154) |
Cash paid for acquisition of noncontrolling interest | (5,172) | |
Change in cash, cash equivalents, and restricted cash | 59 | (176) |
Cash, cash equivalents, and restricted cash at beginning of period | 6,482 | 9,158 |
Cash, cash equivalents, and restricted cash at end of period | 6,541 | 8,982 |
Supplemental Cash Flow and Noncash Information | ||
Cash paid for interest, net of interest capitalized | 15,918 | 15,298 |
Supplemental disclosure of noncash activities: | ||
Accretion of liability | 4,070 | 7,266 |
Derivative valuation adjustment | 242 | 279 |
Discount on issuance of unsecured senior notes | 2,254 | |
Mortgage loan assumptions | 7,166 | |
Issuance of OP units | 4,782 | |
Acquisition of noncontrolling interest in subsidiary | (4,828) | |
Contributions from noncontrolling interests in subsidiaries | 4,828 | |
Cubesmart, L P and Subsidiaries | ||
Operating Activities | ||
Net income | 35,786 | 34,799 |
Adjustments to reconcile net income to cash provided by operating activities: | ||
Depreciation and amortization | 39,066 | 35,545 |
Equity in (earnings) losses of real estate ventures | (261) | 184 |
Equity compensation expense | 1,619 | 1,592 |
Accretion of fair market value adjustment of debt | (179) | (183) |
Changes in other operating accounts: | ||
Other assets | (3,212) | (1,352) |
Accounts payable and accrued expenses | 1,806 | (5,558) |
Other liabilities | 833 | 1,105 |
Net cash provided by operating activities | 75,458 | 66,132 |
Investing Activities | ||
Acquisitions of storage facilities | (25,097) | (4,034) |
Additions and improvements to storage facilities | (6,153) | (5,394) |
Development costs | (49,748) | (39,663) |
Investment in real estate ventures | (107) | (10,320) |
Cash distributed from real estate ventures | 2,072 | 2,257 |
Net cash used in investing activities | (79,033) | (57,154) |
Proceeds from: | ||
Unsecured senior notes | 347,746 | |
Revolving credit facility | 279,020 | 156,700 |
Principal payments on: | ||
Revolving credit facility | (378,400) | (102,000) |
Unsecured term loans | (200,000) | |
Mortgage loans and notes payable | (701) | (7,831) |
Loan procurement costs | (2,634) | |
Settlement of hedge transactions | (807) | |
Acquisition of noncontrolling interest in subsidiary | (5,172) | |
Proceeds from issuance of common OP units | 24,580 | (43) |
Cash paid upon vesting of restricted OP units | (353) | (1,411) |
Exercise of OP unit options | 1,049 | 2 |
Contributions from noncontrolling interests in subsidiaries | 738 | |
Distributions paid to noncontrolling interests in subsidiaries | (66) | |
Distributions paid to common OP unitholders | (60,628) | (55,309) |
Net cash provided by (used in) financing activities | 3,634 | (9,154) |
Cash paid for acquisition of noncontrolling interest | (5,172) | |
Change in cash, cash equivalents, and restricted cash | 59 | (176) |
Cash, cash equivalents, and restricted cash at beginning of period | 6,482 | 9,158 |
Cash, cash equivalents, and restricted cash at end of period | 6,541 | 8,982 |
Supplemental Cash Flow and Noncash Information | ||
Cash paid for interest, net of interest capitalized | 15,918 | 15,298 |
Supplemental disclosure of noncash activities: | ||
Accretion of liability | 4,070 | 7,266 |
Derivative valuation adjustment | 242 | 279 |
Discount on issuance of unsecured senior notes | 2,254 | |
Mortgage loan assumptions | 7,166 | |
Issuance of OP units | $ 4,782 | |
Acquisition of noncontrolling interest in subsidiary | (4,828) | |
Contributions from noncontrolling interests in subsidiaries | $ 4,828 |