Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Nov. 04, 2015 | |
Document and Entity Information | ||
Entity Registrant Name | CubeSmart | |
Entity Central Index Key | 1,298,675 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 172,527,008 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
ASSETS | ||
Storage facilities | $ 3,323,554 | $ 3,117,198 |
Less: Accumulated depreciation | (569,493) | (492,069) |
Storage facilities, net (including VIE assets of $93,512 and $49,829, respectively) | 2,754,061 | 2,625,129 |
Cash and cash equivalents | 3,018 | 2,901 |
Restricted cash | 2,746 | 3,305 |
Loan procurement costs, net of amortization | 11,240 | 10,653 |
Investment in real estate venture, at equity | 90,825 | 95,709 |
Assets held for sale | 27,505 | |
Other assets, net | 40,511 | 48,642 |
Total assets | 2,929,906 | 2,786,339 |
LIABILITIES AND EQUITY | ||
Unsecured senior notes | 500,000 | 500,000 |
Revolving credit facility | 167,800 | 78,000 |
Unsecured term loans | 400,000 | 400,000 |
Mortgage loans and notes payable | 120,444 | 195,851 |
Accounts payable, accrued expenses and other liabilities | 88,259 | 69,198 |
Distributions payable | 29,241 | 28,137 |
Deferred revenue | 17,079 | 15,311 |
Security deposits | 393 | 401 |
Other liabilities held for sale | 725 | |
Total liabilities | 1,323,941 | 1,286,898 |
Noncontrolling interests in the Operating Partnership | $ 60,180 | $ 49,823 |
Commitments and contingencies | ||
Equity | ||
7.75% Series A Preferred shares $.01 par value, 3,220,000 shares authorized, 3,100,000 shares issued and outstanding at September 30, 2015 and December 31, 2014 , respectively | $ 31 | $ 31 |
Common shares $.01 par value, 400,000,000 shares authorized, 170,926,675 and 163,956,675 shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively | 1,709 | 1,639 |
Additional paid in capital | 2,127,252 | 1,974,308 |
Accumulated other comprehensive loss | (8,824) | (8,759) |
Accumulated deficit | (576,086) | (519,193) |
Total CubeSmart shareholders' equity | 1,544,082 | 1,448,026 |
Noncontrolling interests in subsidiaries | 1,703 | 1,592 |
Total equity | 1,545,785 | 1,449,618 |
Total liabilities and equity | $ 2,929,906 | $ 2,786,339 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Storage facilities, net | $ 2,754,061 | $ 2,625,129 |
Series A Preferred shares, percentage | 7.75% | 7.75% |
Series A Preferred shares, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Series A Preferred shares, shares authorized | 3,220,000 | 3,220,000 |
Series A Preferred shares, shares issued | 3,100,000 | 3,100,000 |
Series A Preferred shares, shares outstanding | 3,100,000 | 3,100,000 |
Common shares, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common shares, shares authorized | 400,000,000 | 400,000,000 |
Common shares, shares issued | 170,926,675 | 163,956,675 |
Common shares, shares outstanding | 170,926,675 | 163,956,675 |
VIE | ||
Storage facilities, net | $ 93,512 | $ 49,829 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
REVENUES | ||||
Rental income | $ 102,385 | $ 85,392 | $ 290,744 | $ 242,177 |
Other property related income | 11,827 | 10,142 | 33,755 | 30,088 |
Property management fee income | 1,758 | 1,558 | 5,030 | 4,431 |
Total revenues | 115,970 | 97,092 | 329,529 | 276,696 |
OPERATING EXPENSES | ||||
Property operating expenses | 39,297 | 33,622 | 114,938 | 97,992 |
Depreciation and amortization | 38,744 | 31,622 | 114,725 | 90,224 |
General and administrative | 7,002 | 7,464 | 21,289 | 21,092 |
Acquisition related costs | 1,222 | 1,258 | 2,485 | 3,658 |
Total operating expenses | 86,265 | 73,966 | 253,437 | 212,966 |
OPERATING (EXPENSE) INCOME | 29,705 | 23,126 | 76,092 | 63,730 |
Interest: | ||||
Interest expense on loans | (10,399) | (11,772) | (32,324) | (35,670) |
Loan procurement amortization expense | (537) | (566) | (1,742) | (1,650) |
Equity in earnings (losses) of real estate ventures | 139 | (1,860) | (199) | (4,958) |
Gain from sale of real estate | 475 | |||
Other | (288) | (337) | (812) | (1,103) |
Total other expense | (11,085) | (14,535) | (35,077) | (42,906) |
INCOME FROM CONTINUING OPERATIONS | 18,620 | 8,591 | 41,015 | 20,824 |
DISCONTINUED OPERATIONS | ||||
Income from discontinued operations | 336 | |||
Total discontinued operations | 336 | |||
NET INCOME | 18,620 | 8,591 | 41,015 | 21,160 |
NET (INCOME) LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS | ||||
Noncontrolling interests in the Operating Partnership | (223) | (106) | (475) | (250) |
Noncontrolling interest in subsidiaries | 41 | (5) | 56 | (14) |
NET INCOME ATTRIBUTABLE TO THE COMPANY | 18,438 | 8,480 | 40,596 | 20,896 |
Distribution to preferred shareholders | (1,502) | (1,502) | (4,506) | (4,506) |
NET INCOME ATTRIBUTABLE TO THE COMPANY'S COMMON SHAREHOLDERS | $ 16,936 | $ 6,978 | $ 36,090 | $ 16,390 |
Basic earnings per share from continuing operations attributable to common shareholders (in dollars per share) | $ 0.10 | $ 0.05 | $ 0.22 | $ 0.11 |
Basic earnings per share attributable to common shareholders (in dollars per share) | 0.10 | 0.05 | 0.22 | 0.11 |
Diluted earnings per share from continuing operations attributable to common shareholders (in dollars per share) | 0.10 | 0.05 | 0.21 | 0.11 |
Diluted earnings per share from discontinued operations attributable to common shareholders (in dollars per share) | $ 0.10 | $ 0.05 | $ 0.21 | $ 0.11 |
Weighted-average basic shares outstanding (in shares) | 169,304 | 149,758 | 167,177 | 144,919 |
Weighted-average diluted shares outstanding (in shares) | 170,901 | 152,006 | 168,705 | 147,082 |
AMOUNTS ATTRIBUTABLE TO THE COMPANY'S COMMON SHAREHOLDERS: | ||||
Income from continuing operations | $ 16,936 | $ 6,978 | $ 36,090 | $ 16,059 |
Total discontinued operations | 331 | |||
Net income | $ 16,936 | $ 6,978 | $ 36,090 | $ 16,390 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||||
NET INCOME | $ 18,620 | $ 8,591 | $ 41,015 | $ 21,160 |
Other comprehensive (loss) income: | ||||
Unrealized (losses) gains on interest rate swaps | (1,821) | 982 | (4,507) | (2,249) |
Reclassification of realized losses on interest rate swaps | 1,576 | 1,616 | 4,713 | 4,793 |
Unrealized loss on foreign currency translation | (215) | (483) | (284) | (55) |
OTHER COMPREHENSIVE (LOSS) INCOME | (460) | 2,115 | (78) | 2,489 |
COMPREHENSIVE INCOME | 18,160 | 10,706 | 40,937 | 23,649 |
Comprehensive income attributable to noncontrolling interests in the Operating Partnership | (217) | (138) | (473) | (285) |
Comprehensive income (loss) attributable to noncontrolling interests in subsidiaries | 49 | 4 | 67 | (12) |
COMPREHENSIVE INCOME ATTRIBUTABLE TO THE COMPANY | $ 17,992 | $ 10,572 | $ 40,531 | $ 23,352 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) shares in Thousands, $ in Thousands | Total Shareholders' Equity | Common Shares | Preferred Shares | Additional Paid-in Capital | Accumulated Other Comprehensive (Loss) Income | Accumulated Deficit | Noncontrolling Interest in Subsidiaries | Noncontrolling Interests in Operating Partnership | Total |
Balance at Dec. 31, 2013 | $ 1,092,276 | $ 1,393 | $ 31 | $ 1,542,703 | $ (11,014) | $ (440,837) | $ 931 | $ 1,093,207 | |
Balance (in shares) at Dec. 31, 2013 | 139,328 | 3,100 | |||||||
Balance of Noncontrolling Interests in the Operating Partnership at Dec. 31, 2013 | $ 36,275 | ||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Contributions from noncontrolling interests in subsidiaries | 595 | 595 | |||||||
Issuance of common shares, net | 235,961 | $ 132 | 235,829 | 235,961 | |||||
Issuance of common shares, net (in shares) | 13,181 | ||||||||
Issuance of restricted shares | 4 | $ 4 | 4 | ||||||
Issuance of restricted shares (in shares) | 424 | ||||||||
Conversion from units to shares | 308 | 308 | (308) | 308 | |||||
Conversion from units to shares (in shares) | 18 | ||||||||
Exercise of stock options | 2,266 | $ 3 | 2,263 | 2,266 | |||||
Exercise of stock options (in shares) | 283 | ||||||||
Amortization of restricted shares | (229) | (229) | (229) | ||||||
Share compensation expense | 644 | 644 | 644 | ||||||
Adjustment for noncontrolling interest in the Operating Partnership | (5,218) | (5,218) | 5,218 | (5,218) | |||||
Net income (loss) | 20,896 | 20,896 | 14 | 20,910 | |||||
Net income (loss) | 250 | ||||||||
Other comprehensive (loss) income: | |||||||||
Unrealized gains on interest rate swaps | 2,506 | 2,506 | 38 | 2,506 | |||||
Unrealized loss on foreign currency translation | (50) | (50) | (2) | (3) | (52) | ||||
Preferred share distributions | (4,506) | (4,506) | (4,506) | ||||||
Common share distributions | (57,692) | (57,692) | (880) | (57,692) | |||||
Balance at Sep. 30, 2014 | 1,287,166 | $ 1,532 | $ 31 | 1,781,518 | (8,558) | (487,357) | 1,538 | 1,288,704 | |
Balance (in shares) at Sep. 30, 2014 | 153,234 | 3,100 | |||||||
Balance of Noncontrolling Interests in the Operating Partnership at Sep. 30, 2014 | 40,590 | ||||||||
Balance at Dec. 31, 2013 | 1,092,276 | $ 1,393 | $ 31 | 1,542,703 | (11,014) | (440,837) | 931 | 1,093,207 | |
Balance (in shares) at Dec. 31, 2013 | 139,328 | 3,100 | |||||||
Balance of Noncontrolling Interests in the Operating Partnership at Dec. 31, 2013 | 36,275 | ||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Adjustment for noncontrolling interest in the Operating Partnership | (14,800) | ||||||||
Balance at Dec. 31, 2014 | 1,448,026 | $ 1,639 | $ 31 | 1,974,308 | (8,759) | (519,193) | 1,592 | 1,449,618 | |
Balance (in shares) at Dec. 31, 2014 | 163,957 | 3,100 | |||||||
Balance of Noncontrolling Interests in the Operating Partnership at Dec. 31, 2014 | 49,823 | 49,823 | |||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Contributions from noncontrolling interests in subsidiaries | 178 | 178 | |||||||
Issuance of common shares, net | 136,662 | $ 56 | 136,606 | 136,662 | |||||
Issuance of common shares, net (in shares) | 5,515 | ||||||||
Issuance of restricted shares | 1 | $ 1 | 1 | ||||||
Issuance of restricted shares (in shares) | 161 | ||||||||
Issuance of OP Units | 500 | ||||||||
Conversion from units to shares | 1,705 | $ 1 | 1,704 | (1,705) | 1,705 | ||||
Conversion from units to shares (in shares) | 66 | ||||||||
Exercise of stock options | 13,396 | $ 12 | 13,384 | 13,396 | |||||
Exercise of stock options (in shares) | 1,228 | ||||||||
Amortization of restricted shares | 509 | 509 | 509 | ||||||
Share compensation expense | 741 | 741 | 741 | ||||||
Adjustment for noncontrolling interest in the Operating Partnership | (12,166) | (12,166) | 12,166 | (12,166) | |||||
Net income (loss) | 40,596 | 40,596 | (56) | 40,540 | |||||
Net income (loss) | 475 | ||||||||
Other comprehensive (loss) income: | |||||||||
Unrealized gains on interest rate swaps | 203 | 203 | 3 | 203 | |||||
Unrealized loss on foreign currency translation | (268) | (268) | (11) | (5) | (279) | ||||
Preferred share distributions | (4,506) | (4,506) | (4,506) | ||||||
Common share distributions | (80,817) | (80,817) | (1,077) | (80,817) | |||||
Balance at Sep. 30, 2015 | $ 1,544,082 | $ 1,709 | $ 31 | $ 2,127,252 | $ (8,824) | $ (576,086) | $ 1,703 | 1,545,785 | |
Balance (in shares) at Sep. 30, 2015 | 170,927 | 3,100 | |||||||
Balance of Noncontrolling Interests in the Operating Partnership at Sep. 30, 2015 | $ 60,180 | $ 60,180 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Operating Activities | ||
Net income | $ 41,015 | $ 21,160 |
Adjustments to reconcile net income to cash provided by operating activities: | ||
Depreciation and amortization | 116,467 | 91,874 |
Gain from sale of real estate | (475) | |
Equity compensation expense | 1,250 | 415 |
Accretion of fair market value adjustment of debt | (1,173) | (1,247) |
Equity in losses of real estate ventures | 199 | 4,958 |
Changes in other operating accounts: | ||
Other assets | (3,277) | (936) |
Restricted cash | 507 | (293) |
Accounts payable and accrued expenses | 6,086 | 2,531 |
Other liabilities | 1,417 | 945 |
Net cash provided by operating activities | 162,491 | 118,932 |
Investing Activities | ||
Acquisitions of storage facilities | (161,852) | (255,865) |
Additions and improvements to storage facilities | (18,336) | (12,870) |
Development costs | (58,399) | (17,027) |
Cash contributed to real estate venture | (2,350) | |
Cash distributed from real estate venture | 4,685 | 55,381 |
Proceeds from sale of real estate, net | 13,475 | |
Fundings of notes receivable | (4,100) | |
Change in restricted cash | 99 | 283 |
Net cash used in investing activities | (237,903) | (218,973) |
Proceeds from: | ||
Revolving credit facility | 671,800 | 578,000 |
Principal payments on: | ||
Revolving credit facility | (582,000) | (616,600) |
Mortgage loans and notes payable | (76,929) | (10,589) |
Loan procurement costs | (2,283) | (274) |
Proceeds from issuance of common shares, net | 136,663 | 235,965 |
Exercise of stock options | 13,396 | 2,266 |
Contributions from noncontrolling interests in subsidiaries | 178 | 595 |
Distributions paid to common shareholders | (79,706) | (55,844) |
Distributions paid to preferred shareholders | (4,506) | (4,506) |
Distributions paid to noncontrolling interests in Operating Partnership | (1,084) | (884) |
Net cash provided by financing activities | 75,529 | 128,129 |
Change in cash and cash equivalents | 117 | 28,088 |
Cash and cash equivalents at beginning of year | 2,901 | 3,176 |
Cash and cash equivalents at end of year | 3,018 | 31,264 |
Supplemental Cash Flow and Noncash Information | ||
Cash paid for interest, net of interest capitalized | 35,567 | 38,240 |
Supplemental disclosure of noncash activities: | ||
Accretion of liability | 11,421 | 5,357 |
Derivative valuation adjustment | 206 | 2,544 |
Foreign currency translation adjustment | (284) | (55) |
Mortgage loan assumption - acquisitions of storage facilities | $ 2,695 | $ 27,467 |
ORGANIZATION AND NATURE OF OPER
ORGANIZATION AND NATURE OF OPERATIONS | 9 Months Ended |
Sep. 30, 2015 | |
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 September 30, 2015 , the Company owned self-storage facilities located in 22 states throughout the United States and the District of Columbia which are presented under one reportable segment: the Company owns, operates, develops, manages and acquires self-storage facilities. As of September 30, 2015 , the Parent Company owned approximately 98.7% of the partnership interests (“OP Units”) of the Operating Partnership. The remaining OP Units, consisting exclusively of limited partner interests, are held by persons who contributed their interests in facilities to the Operating Partnership in exchange for OP Units. Under the partnership agreement, these persons have the right to tender their OP Units for redemption to the Operating Partnership at any time for cash equal to the fair value of an equivalent number of common shares of the Parent Company. In lieu of delivering cash, however, the Parent Company, as the Operating Partnership’s general partner, may, at its option, choose to acquire any OP Units so tendered by issuing common shares in exchange for the tendered OP Units. If the Parent Company so chooses, its common shares will be exchanged for OP Units on a one -for-one basis. This one-for-one exchange ratio is subject to adjustment to prevent dilution. With each such exchange or redemption, the Parent Company’s percentage ownership in the Operating Partnership will increase. In addition, whenever the Parent Company issues common or other classes of its shares, it contributes the net proceeds it receives from the issuance to the Operating Partnership and the Operating Partnership issues to the Parent Company an equal number of OP Units or other partnership interests having preferences and rights that mirror the preferences and rights of the shares issued. This structure is commonly referred to as an umbrella partnershi p REIT or “UPREIT ” . |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2015 | |
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, 2014 , 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, 2014 . The results of operations for the three and nine months ended September 30, 2015 and 2014 are not necessarily indicative of the results of operations to be expected for any future period or the full year. Recent Accounting Pronouncements In September 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2015-16, Simplifying the Accounting for Measurement-Period Adjustments, which amends the current business combination guidance to require that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined, as opposed to having to revise prior period information. The standard also requires additional disclosure about the impact on current-period income statement line items, of adjustments that would have been recognized in prior periods if prior period information had been revised. The new standard is effective for the Company on January 1, 2016. In April 2015, the FASB issued ASU No. 2015-03, an update to the accounting standard relating to the presentation of debt issuance costs. Under the new guidance, debt issuance costs related to a recognized debt liability will be presented on the balance sheet as a direct deduction from the debt liability. In the event that there is not an associated debt liability recorded in the consolidated financial statements, the debt issuance costs will continue to be recorded on the consolidated balance sheet as an asset until the debt liability is recorded. This amendment becomes effective for the Company on January 1, 2016. In February 2015, the FASB issued ASU No. 2015-02, Consolidation – Amendments to the Consolidation Analysis, which amends the current consolidation guidance affecting both the variable interest entity (“VIE”) and voting interest entity (“VOE”) consolidation models. The standard does not add or remove any of the characteristics in determining if an entity is a VIE or VOE, but rather enhances the way the Company assesses some of these characteristics. The new standard is effective for the Company on January 1, 2016. The Company is still evaluating the effects of the standard on its consolidated financial statements and related disclosures. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance under GAAP when it becomes effective. The new standard will be effective for the Company beginning on January 1, 2018, however early application beginning on January 1, 2017 is permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company has not yet selected a transition method nor has it determined the effect of the standard on its financial statements and related disclosures. |
STORAGE FACILITIES
STORAGE FACILITIES | 9 Months Ended |
Sep. 30, 2015 | |
STORAGE FACILITIES | |
STORAGE FACILITIES | 3. STORAGE FACILITIES The book value of the Company’s real estate assets is summarized as follows: September 30, December 31, 2015 2014 (in thousands) Land $ $ Buildings and improvements Equipment Construction in progress Storage facilities Less Accumulated depreciation Storage facilities, net $ $ The following table summarizes the Company’s acquisition and disposition activity from the period beginning on January 1, 2014 through September 30, 2015: Number of Purchase / Sale Price Asset/Portfolio Market Transaction Date Facilities (in thousands) 2015 Acquisitions: Texas Asset Texas Markets - Major February 2015 1 $ HSRE Assets Chicago March 2015 4 Arizona Asset Arizona / Las Vegas March 2015 1 Tennessee Asset Tennessee March 2015 1 Texas Asset Texas Markets - Major April 2015 1 Florida Asset Florida Markets - Other May 2015 1 Arizona Asset Arizona / Las Vegas June 2015 1 Florida Asset Florida Markets - Other June 2015 1 Texas Asset Texas Markets - Major July 2015 1 Maryland Asset Baltimore / DC July 2015 1 Maryland Asset Baltimore / DC July 2015 1 New York/New Jersey Assets New York / Northern NJ August 2015 2 16 $ 2014 Acquisitions: Connecticut Asset Connecticut January 2014 1 $ Florida Asset Miami / Ft. Lauderdale January 2014 1 Florida Assets Florida Markets - Other January 2014 2 California Asset Other West January 2014 1 Maryland Asset Baltimore / DC February 2014 1 Maryland Asset Baltimore / DC February 2014 1 Arizona Asset Arizona / Las Vegas March 2014 1 Pennsylvania Asset Philadelphia / Southern NJ March 2014 1 Texas Asset Texas Markets - Major March 2014 1 Texas Asset Texas Markets - Major April 2014 1 New York Assets New York / Northern NJ April 2014 2 Florida Asset Florida Markets - Other April 2014 1 Massachusetts Asset Other Northeast April 2014 1 Indiana Asset Other Midwest May 2014 1 Florida Assets Florida Markets - Other June 2014 3 Florida Assets Florida Markets - Other July 2014 2 Massachusetts Asset Boston September 2014 1 Texas Asset Texas Markets - Major October 2014 1 Texas Asset Texas Markets - Major October 2014 1 Texas Asset Texas Markets - Major October 2014 1 HSRE Assets Various (see note 4) November 2014 22 Texas Asset Texas Markets - Major December 2014 1 Florida Assets Florida Markets - Other December 2014 3 New York Asset New York / Northern NJ December 2014 1 Texas Asset Texas Markets - Major December 2014 1 53 $ |
INVESTMENT ACTIVITY
INVESTMENT ACTIVITY | 9 Months Ended |
Sep. 30, 2015 | |
INVESTMENT ACTIVITY | |
INVESTMENT ACTIVITY | 4. INVESTMENT ACTIVITY 2015 Acquisitions During 2014, the Operating Partnership entered into an Agreement for Purchase and Sale with certain limited liability companies controlled by HSRE REIT I and HSRE REIT II, both Maryland real estate investment trusts, to acquire (the “HSRE Acquisition”) 26 self-storage facilities for an aggregate purchase price of $223.0 million plus customary closing costs. During 2014, the Company closed on the first tranche of 22 facilities comprising the HSRE Acquisition, for an aggregate purchase price of $195.5 million. On March 18, 2015, the Company closed on the second tranche of the remaining four self-storage facilities comprising the HSRE Acquisition, for an aggregate purchase price of $27.5 million. The four facilities purchased in the second tranche are located in Illinois. In connection with this acquisition, the Company allocated a portion of the purchase price to the intangible value of in-place leases, which aggregated to $2.7 million at the time of the acquisition and prior to any amortization of such amounts. The estimated life of these in-place leases was 12 months, and the amortization expense that was recognized during the nine months ended September 30, 2015 was approximately $1. 3 million . During the nine months ended September 30, 2015 , the Company acquired twelve additional self-storage facilities, including one facility upon completion of construction and the issuance of a certificate of occupancy, located throughout the United States for an aggregate purchase price of approximately $140.7 million. In connection with these acquisitions, the Company allocated a portion of the purchase price to the tangible and intangible assets acquired based on fair value. Intangible assets consist of in-place leases, which aggregated $9. 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 nine months ended September 30, 2015 was approximately $2.2 million. In connection with one of the acquired facilities, the Company assumed mortgage debt that was recorded at a fair value of $2.7 million, which fair value includes an outstanding principal balance totaling $2.5 million and a net premium of $0.2 million to reflect the estimated fair value of the debt at the time of assumption. As final information regarding fair value of the assets acquired and liabilities assumed is received and estimates are refined, appropriate adjustments, if necessary, will be made to the purchase price allocation, in no case later than twelve months of the acquisition date. As of September 30, 2015, the Company was under contract and had made aggregate deposits of $ 5 .1 million associated with four facilities under construction for a total purchase price of $ 90 .2 million. In connection with one of the facilities, the Company provided a $4.1 million loan for the purpose of acquiring the premises on which the facility will be built. The deposits and note receivable are reflected in Other assets, net on the Company’s consolidated balance sheets. The purchase of these four facilities is expected to occur by the fourth quarter of 2016 after the completion of construction and the issuance of a certificate of occupancy. These acquisitions are subject to due diligence and other customary closing conditions and no assurance can be provided that these acquisitions will be completed on the terms described, or at all. Development At September 30, 2015, the Company had five contracts through joint ventures for the construction of four self-storage facilities located in New York (see note 12) and one self-storage facility located in Washington, D.C. Construction for all projects is expected to be completed by the third quarter of 2016. At September 30, 2015, development costs for these projects totaled $ 85.3 million. These costs are capitalized to construction in progress while the projects are under d evelopment and are reflected in Storage facilities on the Company’s consolidated balance sheets. During the second quarter of 2015, the Company, through a joint venture in which the Company owns a 90% interest, completed the construction of a self-storage facility located in Arlington, VA and opened for operation. Total costs for this project were $17.1 million . These costs are capitalized to land, building and improvements as well as equipment and are reflected in Storage facilities on the Company’s consolidated balance sheets. During the first quarter of 2014, the Company completed the construction of a self-storage facility subject to a ground lease located in Bronx, NY and opened for operation. Total costs for this project were $17.2 million. These costs are capitalized to building and improvements as well as equipment and are reflected in Storage facilities on the Company’s consolidated balance sheets. During the fourth quarter of 2013, the Company completed the construction of the portion of a mixed-use facility comprised of office space and self-storage and relocated its corporate headquarters to 5 Old Lancaster Road in Malvern, PA, a suburb of Philadelphia. During the first quarter of 2014, construction was completed on the portion of the building comprised of rentable storage space and the facility opened for operation. Total costs for this mixed-use project were $25.1 million. 2014 Acquisitions On November 3, 2014, the Company closed on the first tranche of 22 self-storage facilities comprising the HSRE Acquisition, for an aggregate purchase price of $195.5 million. The 22 self-storage facilities purchased are located in California, Florida, Illinois, Nevada, New York, Ohio and Rhode Island. In connection with this acquisition, the Company allocated a portion of the purchase price to the intangible value of in-place leases, which aggregated to $14.5 million at the time of the acquisition and prior to any amortization of such amounts. The estimated life of these in-place leases was 12 months, and the amortization expense that was recognized during the nine months ended September 30, 2015 was approximately $10.9 million. During 2014, the Company acquired 31 additional self-storage facilities located throughout the United States for an aggregate purchase price of approximately $372.7 million. In connection with these acquisitions, the Company allocated a portion of the purchase price to the intangible value of in-place leases, which aggregated $23.8 million at the time of such 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 nine months ended September 30, 2015 was approximately $9.8 million. In connection with four of the acquired facilities, the Company assumed mortgage debt that was recorded at a fair value of $27.5 million, which fair value includes an outstanding principal balance totaling $26.0 million and a net premium of $1.5 million to reflect the estimated fair value of the debt at the time of assumption. The following table summarizes the Company’s revenue and earnings associated with the 2015 and 2014 acquisitions from the respective acquisition dates in the period they were acquired, included in the consolidated statements of operations for the three and nine months ended September 30, 2015 and 2014 : Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 (in thousands) Total revenue $ $ $ $ Net loss |
INVESTMENT IN UNCONSOLIDATED RE
INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURE | 9 Months Ended |
Sep. 30, 2015 | |
INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURE | |
INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURE | 5. INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURE On December 10, 2013, the Company acquired a 50% ownership interest in 35 self-storage facilities located in Texas (34) and North Carolina (1) through a newly-formed joint venture (“HHF”). HHF paid $315.7 million for these facilities, of which $12.1 million was allocated to the value of the in-place lease intangible. The Company and the unaffiliated joint venture partner (collectively the “HHF Partners”), each contributed cash equal to 50% of the capital required to fund the acquisition. HHF was not consolidated as the entity was not determined to be a variable interest entity (“VIE”) and the HHF Partners have equal ownership and voting rights in the entity. The Company accounts for its unconsolidated interest in the real estate venture using the equity method. The Company’s investment in HHF is included in Investment in real estate venture, at equity on the Company’s consolidated balance sheets and income and losses attributed to HHF are presented in Equity in earnings (losses) of real estate ventures on the Company’s consolidated statements of operations. On May 1, 2014, HHF obtained a $100 million loan secured by the 34 self-storage facilities located in Texas that are owned by the venture. There is no recourse to the Company, subject to customary exceptions to non-recourse provisions. The loan bears interest at 3.59% per annum and matures on April 30, 2021. This financing completed the planned capital structure of HHF and proceeds (net of closing costs) of $99.2 million were distributed proportionately to the partners. The amounts reflected in the following table are based on the historical financial information of the real estate venture. The following is a summary of the financial position of the HHF venture as of September 30, 2015 and December 31, 2014 (in thousands): September 30, December 31, 2015 2014 Assets Storage facilities, net $ $ Other assets Total assets $ $ Liabilities and equity Other liabilities $ $ Debt Equity CubeSmart Joint venture partner Total liabilities and equity $ $ The following is a summary of results of operations of the real estate venture for the three and nine months ended September 30, 2015 and 2014 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Total revenues $ $ $ $ Operating expenses Interest expense, net Depreciation and amortization Net income (loss) $ $ $ $ Company’s share of net income (loss) $ $ $ $ |
UNSECURED SENIOR NOTES
UNSECURED SENIOR NOTES | 9 Months Ended |
Sep. 30, 2015 | |
UNSECURED SENIOR NOTES | |
UNSECURED SENIOR NOTES | 6. UNSECURED SENIOR NOTES On December 17, 2013, the Operating Partnership issued $250 million in aggregate principal amount of 4.375% unsecured senior notes due December 15, 2023 (the “2023 Senior Notes”). On June 26, 2012, the Operating Partnership issued $250 million in aggregate principal amount of 4.80% unsecured senior notes due July 15, 2022 (the “2022 Senior Notes”) . The 2023 Senior Notes along with the 2022 Senior Notes are collectively referred to as the “Senior Notes.” 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 September 30, 2015 , 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 | 9 Months Ended |
Sep. 30, 2015 | |
REVOLVING CREDIT FACILITY AND UNSECURED TERM LOANS | |
REVOLVING CREDIT FACILITY AND UNSECURED TERM LOANS | 7. REVOLVING CREDIT FACILITY AND UNSECURED TERM LOANS On June 20, 2011, the Company entered into an unsecured term loan agreement (the “Term Loan Facility”) which consisted of a $100 million term loan with a five -year maturity (“Term Loan A”) and a $100 million term loan with a seven -year maturity (“Term Loan B”). On December 9, 2011, the Company entered into a credit facility (the “Credit Facility”) comprised of a $100 million unsecured term loan maturing in December 2014 (“Term Loan C”); a $200 million unsecured term loan maturing in March 2017 (“Term Loan D”); and a $300 million unsecured revolving facility maturing in December 2015 (“Revolver”). On June 18, 2013 , the Company amended both the Term Loan Facility and Credit Facility. With respect to the Term Loan Facility, among other things, the amendment extended the maturity date to June 2018 and decreased the pricing of Term Loan A, while Term Loan B remained unchanged by the amendment. With respect to the Credit Facility, among other things, the amendment extended the maturity date to January 2019 and decreased the pricing of Term Loan D. On August 5, 2014, the Company further amended the Term Loan Facility to extend the maturity date to January 2020 and decrease the pricing of Term Loan B. On December 17, 2013, the Company repaid the $100 million balance under Term Loan C that was scheduled to mature in December 2014. Pricing on the Term Loan Facility depends on the Company’s unsecured debt credit ratings. At the Company’s current Baa2/BBB level, amounts drawn under Term Loan A are priced at 1.30% over LIBOR , while amounts drawn under Term Loan B are priced at 1.15% over LIBOR . On April 22, 2015, the Company further amended its Credit Facility with respect to the Revolver. Among other things, the amendment increased the aggregate amount of the Revolver from $300 million to $500 million, decreased the facility fee from 0.20% to 0.15% and extended the maturity date from June 18, 2017 to April 22, 2020. Pricing on the Credit Facility depends on the Company’s unsecured debt credit ratings. At the Company’s current Baa2/BBB level, amounts drawn under the Revolver are priced at 1.25% over LIBOR , inclusive of a facility fee of 0.15% , while amounts drawn under Term Loan D are priced at 1.30% over LIBOR . T he Company incurred costs of $2.3 million in 2015 in connection with amending the Credit Facility and capitalized such costs as a component of loan procurement costs, net of amortization on the consolidated balance sheet. Additionally, in connection with the amendment, $0.1 million of unamortized costs were written-off. All remaining unamortized costs, along with costs incurred in connection with the amendment, are amortized as an adjustment to interest expense over the remaining term of the modified facilities. As of September 30, 2015 , $200 million of unsecured term loan borrowings were outstanding under the Term Loan Facility, $200 million of unsecured term loan borrowings were outstanding under the Credit Facility, $167.8 million of unsecured revolving credit facility borrowings were outstanding under the Credit Facility and $332.2 million was available for borrowing under the unsecured revolving portion of the Credit Facility. The available balance under the unsecured revolving portion of the Credit Facility is reduced by an outstanding letter of credit of $30 thousand. In connection with a portion of the unsecured borrowings, the Company had interest rate swaps as of September 30, 2015 that fix 30 -day LIBOR (see note 10). As of September 30, 2015 , borrowings under the Credit Facility and Term Loan Facility, as amended and after giving effect to the interest rate swaps, had an effective weighted average interest rate of 2.54% . The Term Loan Facility and the term loan under the Credit Facility were fully drawn at September 30, 2015 and no further borrowings may be made under the term loans. The Company’s ability to borrow under the revolving portion of the Credit Facility is subject to ongoing compliance with certain financial covenants which include: · Maximum total indebtedness to total asset value of 60.0% at any time; · Minimum fixed charge coverage ratio of 1.50:1 .00; and · Minimum tangible net worth of $821,211,200 plus 75% of net proceeds from equity issuances after June 30, 2010 . Further, under the Credit Facility and Term Loan Facility, the Company is restricted from paying distributions on the Parent Company’s common shares in excess of the greater of (i) 95% of funds from operations, and (ii) such amount as may be necessary to maintain the Parent Company’s REIT status. As of September 30, 2015 , 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 | 9 Months Ended |
Sep. 30, 2015 | |
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: September 30, December 31, Effective Maturity Mortgage Loans and Notes Payable 2015 2014 Interest Rate Date (in thousands) YSI 29 — % Aug-15 YSI 13 — % Oct-15 YSI 20 — % Nov-15 YSI 63 % Dec-15 YSI 59 % Mar-16 YSI 60 % Aug-16 YSI 51 % Sep-16 YSI 64 % Oct-16 YSI 62 % Dec-16 YSI 33 % Jul-19 YSI 26 % Nov-20 YSI 57 % Nov-20 YSI 55 % Jun-21 YSI 24 % Jun-21 YSI 65 — % Jun-23 Unamortized fair value adjustment Total mortgage loans and notes payable $ $ As of September 30, 2015 and December 31, 2014 , the Company’s mortgage loans payable were secured by certain of its self-storage facilities with net book values of approximately $211.7 million and $344.2 million, respectively. The following table represents the future principal payment requirements on the outstanding mortgage loans and notes payable at September 30, 2015 (in thousands): 2015 $ 2016 2017 2018 2019 2020 and thereafter Total mortgage payments Plus: Unamortized fair value adjustment Total mortgage indebtedness $ |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE LOSS | 9 Months Ended |
Sep. 30, 2015 | |
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 nine months ended September 30, 2015 (in thousands): Unrealized losses Unrealized loss on on interest rate foreign currency swaps translation Total Balance at December 31, 2014 $ $ $ Other comprehensive loss before reclassifications Amounts reclassified from accumulated other comprehensive loss (a) — Net current-period other comprehensive income (loss) Balance at September 30, 2015 $ $ $ (a) See note 10 for additional information about the effects of the amounts reclassified . |
RISK MANAGEMENT AND USE OF FINA
RISK MANAGEMENT AND USE OF FINANCIAL INSTRUMENTS | 9 Months Ended |
Sep. 30, 2015 | |
RISK MANAGEMENT AND USE OF FINANCIAL INSTRUMENTS | |
RISK MANAGEMENT AND USE OF FINANCIAL INSTRUMENTS | 10. RISK MANAGEMENT AND USE OF FINANCIAL INSTRUMENTS The Company’s use of derivative instruments is limited to the utilization of interest rate swap agreements or other instruments to manage interest rate risk exposures and not for speculative purposes. The principal objective of such arrangements is to minimize the risks and/or costs associated with the Company’s operating and financial structure, as well as to hedge specific transactions. The counterparties to these arrangements are major financial institutions with which the Company and its subsidiaries may also have other financial relationships. The Company is potentially exposed to credit loss in the event of non-performance by these counterparties. However, because of the high credit ratings of the counterparties, the Company does not anticipate that any of the counterparties will fail to meet these obligations as they come due. The Company does not hedge credit or property value market risks. The Company has entered into interest rate swap agreements that qualify and are designated as cash flow hedges designed to reduce the impact of interest rate changes on its variable rate debt. Therefore, the interest rate swaps are recorded in the consolidated balance sheet at fair value and the related gains or losses are deferred in shareholders’ equity as accumulated other comprehensive loss. These deferred gains and losses are amortized into interest expense during the period or periods in which the related interest payments affect earnings. However, to the extent that the interest rate swaps are not perfectly effective in offsetting the change in value of the interest payments being hedged, the ineffective portion of these contracts is recognized in earnings immediately. The Company formally assesses, both at inception of a hedge and on an on-going basis, whether each derivative is highly-effective in offsetting changes in cash flows of the hedged item. If management determines that a derivative is highly-effective as a hedge, then the Company accounts for the derivative using hedge accounting, pursuant to which gains or losses inherent in the derivative do not impact the Company’s results of operations. If management determines that a derivative is not highly-effective as a hedge or if a derivative ceases to be a highly-effective hedge, the Company will discontinue hedge accounting prospectively and will reflect in its statement of operations realized and unrealized gains and losses in respect of the derivative. The following table summarizes the terms and fair values of the Company’s derivative financial instruments at September 30, 2015 and December 31, 2014 , respectively (dollars in thousands): Hedge Notional Fair Value Product Hedge Type (a) Amount Strike Effective Date Maturity September 30, 2015 December 31, 2014 Swap Cash flow $ % 6/20/2011 6/20/2016 $ $ Swap Cash flow $ % 6/20/2011 6/20/2016 Swap Cash flow $ % 6/20/2011 6/20/2016 Swap Cash flow $ % 12/30/2011 3/31/2017 Swap Cash flow $ % 12/30/2011 3/31/2017 Swap Cash flow $ % 12/30/2011 3/31/2017 Swap Cash flow $ % 12/30/2011 3/31/2017 Swap Cash flow $ % 6/20/2011 6/20/2018 Swap Cash flow $ % 6/20/2011 6/20/2018 Swap Cash flow $ % 6/20/2011 6/20/2018 $ $ $ (a) Hedging unsecured variable rate debt by fixing 30 -day LIBOR. The Company measures its derivative instruments at fair value and records them in the balance sheet as either an asset or liability. As of September 30, 2015 and December 31, 2014 , all derivative instruments were included in accounts payable, accrued expenses and other liabilities in the accompanying consolidated balance sheets. The effective portions of changes in the fair value of the derivatives are reported in accumulated other comprehensive income (loss). Amounts reported in accumulated other comprehensive income (loss) related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. The change in unrealized loss on interest rate swap reflects a reclassification of $4.7 million of unrealized losses from accumulated other comprehensive loss as an increase to interest expense during the nine months ended September 30, 2015 . The Company estimates that $5.1 million will be reclassified as an increase to interest expense within the next 12 months. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2015 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | 11. FAIR VALUE MEASUREMENTS The Company applies the methods of determining fair value as described in authoritative guidance, to value its financial assets and liabilities. As defined in the guidance, fair value is based on the price that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In order to increase consistency and comparability in fair value measurements, the guidance establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data. Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs, to the extent possible, as well as considering counterparty credit risk in its assessment of fair value. Financial assets and liabilities carried at fair value as of September 30, 2015 are classified in the table below in one of the three categories described above (in thousands): Level 1 Level 2 Level 3 Interest Rate Swap Derivative Liabilities $ — $ $ — Total liabilities at fair value $ — $ $ — Financial assets and liabilities carried at fair value as of December 31, 2014 are classified in the table below in one of the three categories described above (in thousands): Level 1 Level 2 Level 3 Interest Rate Swap Derivative Liabilities $ — $ $ — Total liabilities at fair value $ — $ $ — Financial assets and liabilities carried at fair value were classified as Level 2 inputs. For financial liabilities that utilize Level 2 inputs, the Company utilizes both direct and indirect observable price quotes, including LIBOR yield curves, bank price quotes for forward starting swaps, NYMEX futures pricing and common stock price quotes. Below is a summary of valuation techniques for Level 2 financial liabilities: · Interest rate swap derivative assets and liabilities – valued using LIBOR yield curves at the reporting date. Counterparties to these contracts are most often highly rated financial institutions, none of which experienced any significant downgrades in 2015 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 September 30, 2015 , 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, accounts receivable and accounts payable approximate their respective carrying values at September 30, 2015 and December 31, 2014 . The aggregate carrying value of the Company’s debt was $1.2 billion at September 30, 2015 and December 31, 2014 . The estimated fair value of the Company’s debt was $1.2 billion at September 30, 2015 and December 31, 2014 . These estimates were based on a discounted cash flow analysis assuming market interest rates for comparable obligations at September 30, 2015 and December 31, 2014 . 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 | 9 Months Ended |
Sep. 30, 2015 | |
NONCONTROLLING INTERESTS | |
NONCONTROLLING INTERESTS | 12. NONCONTROLLING INTERESTS Interests in Consolidated Real Estate Joint Ventures 2301 Tillotson Ave, LLC (“Tillotson”) was formed to own, operate and develop a self-storage facility in New York, NY. The Company owns a 51% interest in Tillotson and 49% is owned by another member (the “Tillotson Member”). The facility is expected to commence operations during 2016. The Tillotson Member has an option to put its ownership interest in the venture to the Company for $17.0 million within the one -year period after construction of the facility is substantially complete. Additionally, the Company has a one -year option to call the ownership interest of the Tillotson Member for $17.0 million beginning on the second anniversary of the facility’s construction being substantially complete. The Company is accreting the $17.0 million liability during the development period and has accrued $9. 7 million as of September 30, 2015. The Company determined that Tillotson is a variable interest entity, and that the Company is the primary beneficiary. Accordingly, the Company consolidates the assets, liabilities and results of operations of Tillotson. At September 30, 2015, Tillotson had total assets of $14.6 million and total liabilities of $11.3 million. 251 Jamaica Ave, LLC (“Jamaica Ave”) was formed to own, operate and develop a self-storage facility in New York, NY. The Company owns a 51% interest in Jamaica Ave and 49% is owned by another member (the “Jamaica Ave Member”). The facility is expected to commence operations during 2016. The Jamaica Ave Member has an option to put its ownership interest in the venture to the Company for $12.5 million within the one -year period after construction of the facility is substantially complete. Additionally, the Company has a one -year option to call the ownership interest of the Jamaica Ave Member for $12.5 million beginning on the second anniversary of the facility’s construction being substantially complete. The Company is accreting the $12.5 million liability during the development period and has accrued $10. 1 million as of September 30, 2015. The Company determined that Jamaica Ave is a variable interest entity, and that the Company is the primary beneficiary. Accordingly, the Company consolidates the assets, liabilities and results of operations of Jamaica Ave. At September 30, 2015 , Jamaica Ave had total assets of $26. 1 million and total liabilities of $11. 7 million. CS SNL New York Ave, LLC and 186 Jamaica Avenue, LLC, collectively known as “SNL”, were formed with a partner to own, operate and develop two self-storage facilities in the boroughs of New York, NY. The Company owns 90% of SNL. One of the facilities is expected to commence operations during the fourth quarter of 2015, while the other facility is expected to commence operations during 2016. The Company consolidates the assets, liabilities and results of operations of SNL. At September 30, 2015 , SNL had total assets of $26.0 million and total liabilities of $14.2 million. As of September 30, 2015, the Company has provided $12.6 million of a total $22.6 million loan commitment to SNL which is secured by a mortgage on the real estate assets of SNL. The loan and related interest were eliminated during consolidation. Shirlington Rd, LLC (“SRLLC”) was formed to own, operate and develop a self-storage facility in Northern Virginia. The Company owns a 90% interest in SRLLC and the facility commenced operations during the second quarter of 2015. The Company consolidates the assets, liabilities and results of operations of SRLLC. During 2013, SRLLC acquired land for development for $13.1 million. In 2014, SRLLC completed the planned subdivision of the land into two parcels and sold one parcel for $6.5 million. No gain or loss was recorded as a result of this transaction. SRLLC retained the second parcel of land for the development of the storage facility. At September 30, 2015 , SRLLC had total assets of $17.1 million and total liabilities of $13.4 million. As of September 30, 2015, the Company has provided $13.1 million of a total $14.6 million loan commitment to SRLLC, which loan is secured by a mortgage on the real estate assets of SRLLC. The loan and related interest were eliminated during consolidation. USIFB, LLP (“USIFB”) was formed to own, operate, acquire and develop self-storage facilities in England. The Company owns a 97% interest in the USIFB through a wholly-owned subsidiary and USIFB commenced operations at two facilities in London, England during 2008. The Company determined that USIFB is a variable interest entity, and that the Company is the primary beneficiary. Accordingly, the Company consolidates the assets, liabilities and results of operations of USIFB. On December 31, 2013 the Company provided a $6.8 million (£4.1 million) loan secured by a mortgage on real estate assets of USIFB. On June 30, 2014, one of the assets was sold for net proceeds of $7.0 million and the loan was repaid with proceeds from the sale. The loan and any related interest were eliminated during consolidation. At September 30, 2015 , USIFB had total assets of $ 5.3 million and total liabilities of $0.2 million. Operating Partnership Ownership The Company follows guidance regarding the classification and measurement of redeemable securities. Under this guidance, securities that are redeemable for cash or other assets, at the option of the holder and not solely within the control of the issuer, must be classified outside of permanent equity/capital. This classification results in certain outside ownership interests being included as redeemable noncontrolling interests outside of permanent equity/capital in the consolidated balance sheets. The Company makes this determination based on terms in applicable agreements, specifically in relation to redemption provisions. Additionally, with respect to redeemable ownership interests in the Operating Partnership held by third parties for which CubeSmart has a choice to settle the redemption by delivery of its own shares, the Operating Partnership considered the guidance regarding accounting for derivative financial instruments indexed to, and potentially settled in, a company’s own shares, to evaluate whether CubeSmart controls the actions or events necessary to presume share settlement. The guidance also requires that noncontrolling interests classified outside of permanent capital be adjusted each period to the greater of the carrying value based on the accumulation of historical cost or the redemption value. Approximately 1.3% and 1.4% of the outstanding OP Units as of September 30, 2015 and December 31, 2014 , respectively, were not owned by CubeSmart, the sole general partner. The interests in the Operating Partnership represented by these OP Units were a component of the consideration that the Operating Partnership paid to acquire certain self-storage facilities. The holders of the OP Units are limited partners in the Operating Partnership and have the right to require CubeSmart to redeem all or part of their OP Units for, at the general partner’s option, an equivalent number of common shares of CubeSmart or cash based upon the fair value of an equivalent number of common shares of CubeSmart. However, the partnership agreement contains certain provisions that could result in a settlement outside the control of CubeSmart and the Operating Partnership, as CubeSmart does not have the ability to settle in unregistered shares. Accordingly, consistent with the guidance, the Operating Partnership will record the OP Units owned by third parties outside of permanent capital in the consolidated balance sheets. Net income or loss related to the OP Units owned by third parties is excluded from net income or loss attributable to Operating Partner in the consolidated statements of operations. On May 14, 2015, the Company closed on the acquisition of real property that will be developed into a self-storage facility in Washington, D.C. In conjunction with the closing, the Company issued 20,408 OP Units, valued at approximately $0.5 million to pay a portion of the consideration. Additional consideration of $1.5 million will be paid upon the completion of certain milestones within a one-year period from closing. The Company is accreting the $1.5 million liability during the development period and has accrued $0.6 million as of September 30, 2015. At September 30, 2015 and December 31, 2014 , 2,211,650 and 2,257,486 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 September 30, 2015 and December 31, 2014 , as the estimated redemption value exceeded their carrying value. The Operating Partnership recorded an increase to OP Units owned by third parties and a corresponding decrease to capital of $ 12 . 2 million and $ 14.8 million at September 30, 2015 and December 31, 2014 , respectively. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2015 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | 13. RELATED PARTY TRANSACTIONS Affiliated Real Estate Investments The Company provides management services to certain joint ventures and other related party facilities. Management agreements provide generally for management fees of between 5 - 6% of cash collections at the managed facilities. Total management fees for unconsolidated joint ventures or other entities in which the Company held an ownership interest for the three and nine months ended September 30, 2015 totaled $0.2 million and $0.7 million, respectively. Total management fees for unconsolidated joint ventures or other entities in which the Company held an ownership interest for the three and nine months ended September 30, 2014 totaled $0.2 million and $0.6 million, respectively. The management agreements for certain joint ventures, other related parties and third-party facilities provide for the reimbursement to the Company for certain expenses incurred to manage the facilities. These amounts consist of amounts due for management fees, payroll, and other expenses incurred on behalf of the facilities. The amounts due to the Company were $1.4 million and $1.6 million as of September 30, 2015 and December 31, 2014 , respectively, and are reflected in Other assets, net on the Company’s consolidated balance sheets. Additionally, as discussed in note 12, the Company has outstanding mortgage loans receivable from consolidated joint ventures of $25.7 million and $10.8 million as of September 30, 2015 and December 31, 2014 , respectively, which are eliminated for consolidation purposes. The Company believes that all of these related-party receivables are fully collectible. |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 9 Months Ended |
Sep. 30, 2015 | |
DISCONTINUED OPERATIONS | |
DISCONTINUED OPERATIONS | 14. DISCONTINUED OPERATIONS For the three months and nine months ended September 30, 2015, there were no discontinued operations. For the nine months ended September 30, 2014, $0.3 million of discontinued operations relates to real estate tax refunds received as a result of appeals of previous tax assessments on six self-storage facilities that the Company sold in prior years. There were no other income or expense items related to discontinued operations for the nine months ended September 30, 2014. |
PRO FORMA FINANCIAL INFORMATION
PRO FORMA FINANCIAL INFORMATION | 9 Months Ended |
Sep. 30, 2015 | |
PRO FORMA FINANCIAL INFORMATION | |
PRO FORMA FINANCIAL INFORMATION | 15. PRO FORMA FINANCIAL INFORMATION During the nine months ended September 30, 2015 and the year ended December 31, 2014 , the Company acquired sixteen self-storage facilities for an aggregate purchase price of approximately $168.2 million (see note 4) and 53 self-storage facilities for an aggregate purchase price of approximately $568.2 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 2015 and 2014 as if each had occurred as of January 1, 2014 and 2013, 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 nine months ended September 30, 2015 and 2014 based on the assumptions described above: Nine Months Ended September 30, 2015 2014 (in thousands, except per share data) Pro forma revenue $ $ Pro forma income from continuing operations $ $ Earnings per common share from continuing operations: Basic - as reported $ $ Diluted - as reported $ $ Basic - as pro forma $ $ Diluted - as pro forma $ $ |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2015 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | 16. SUBSEQUENT EVENTS On October 2, 2015, USIFB sold its remaining asset in London, England, which was held-for-sale as of September 30, 2015, for approximately $9.3 million. On October 8, 2015 , the Company sold seven assets in Texas and one asset in Florida, all of which were held-for-sale as of September 30, 2015, for an aggregate sales price of $37.8 million. On October 26 , 2015 , the Operating Partnership issued $250.0 million in aggregate principal amount of unsecured senior notes due November 15, 2025 which bear interest at a rate of 4.00% per annum . Net proceeds from the offering were used to repay all of the outstanding indebtedness under the Company’s Revolver . The Company intends to use the remaining proceeds from the offering for general corporate purposes, which may include acquisitions, investments in joint ventures and repayment or repurchase of other indebtedness. |
SUMMARY OF SIGNIFICANT ACCOUN24
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
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, 2014 , 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, 2014 . The results of operations for the three and nine months ended September 30, 2015 and 2014 are not necessarily indicative of the results of operations to be expected for any future period or the full year. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In September 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2015-16, Simplifying the Accounting for Measurement-Period Adjustments, which amends the current business combination guidance to require that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined, as opposed to having to revise prior period information. The standard also requires additional disclosure about the impact on current-period income statement line items, of adjustments that would have been recognized in prior periods if prior period information had been revised. The new standard is effective for the Company on January 1, 2016. In April 2015, the FASB issued ASU No. 2015-03, an update to the accounting standard relating to the presentation of debt issuance costs. Under the new guidance, debt issuance costs related to a recognized debt liability will be presented on the balance sheet as a direct deduction from the debt liability. In the event that there is not an associated debt liability recorded in the consolidated financial statements, the debt issuance costs will continue to be recorded on the consolidated balance sheet as an asset until the debt liability is recorded. This amendment becomes effective for the Company on January 1, 2016. In February 2015, the FASB issued ASU No. 2015-02, Consolidation – Amendments to the Consolidation Analysis, which amends the current consolidation guidance affecting both the variable interest entity (“VIE”) and voting interest entity (“VOE”) consolidation models. The standard does not add or remove any of the characteristics in determining if an entity is a VIE or VOE, but rather enhances the way the Company assesses some of these characteristics. The new standard is effective for the Company on January 1, 2016. The Company is still evaluating the effects of the standard on its consolidated financial statements and related disclosures. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance under GAAP when it becomes effective. The new standard will be effective for the Company beginning on January 1, 2018, however early application beginning on January 1, 2017 is permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company has not yet selected a transition method nor has it determined the effect of the standard on its financial statements and related disclosures. |
STORAGE FACILITIES (Tables)
STORAGE FACILITIES (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
STORAGE FACILITIES | |
Summary of real estate assets | September 30, December 31, 2015 2014 (in thousands) Land $ $ Buildings and improvements Equipment Construction in progress Storage facilities Less Accumulated depreciation Storage facilities, net $ $ |
Schedule of acquisitions and dispositions of real estate assets | Number of Purchase / Sale Price Asset/Portfolio Market Transaction Date Facilities (in thousands) 2015 Acquisitions: Texas Asset Texas Markets - Major February 2015 1 $ HSRE Assets Chicago March 2015 4 Arizona Asset Arizona / Las Vegas March 2015 1 Tennessee Asset Tennessee March 2015 1 Texas Asset Texas Markets - Major April 2015 1 Florida Asset Florida Markets - Other May 2015 1 Arizona Asset Arizona / Las Vegas June 2015 1 Florida Asset Florida Markets - Other June 2015 1 Texas Asset Texas Markets - Major July 2015 1 Maryland Asset Baltimore / DC July 2015 1 Maryland Asset Baltimore / DC July 2015 1 New York/New Jersey Assets New York / Northern NJ August 2015 2 16 $ 2014 Acquisitions: Connecticut Asset Connecticut January 2014 1 $ Florida Asset Miami / Ft. Lauderdale January 2014 1 Florida Assets Florida Markets - Other January 2014 2 California Asset Other West January 2014 1 Maryland Asset Baltimore / DC February 2014 1 Maryland Asset Baltimore / DC February 2014 1 Arizona Asset Arizona / Las Vegas March 2014 1 Pennsylvania Asset Philadelphia / Southern NJ March 2014 1 Texas Asset Texas Markets - Major March 2014 1 Texas Asset Texas Markets - Major April 2014 1 New York Assets New York / Northern NJ April 2014 2 Florida Asset Florida Markets - Other April 2014 1 Massachusetts Asset Other Northeast April 2014 1 Indiana Asset Other Midwest May 2014 1 Florida Assets Florida Markets - Other June 2014 3 Florida Assets Florida Markets - Other July 2014 2 Massachusetts Asset Boston September 2014 1 Texas Asset Texas Markets - Major October 2014 1 Texas Asset Texas Markets - Major October 2014 1 Texas Asset Texas Markets - Major October 2014 1 HSRE Assets Various (see note 4) November 2014 22 Texas Asset Texas Markets - Major December 2014 1 Florida Assets Florida Markets - Other December 2014 3 New York Asset New York / Northern NJ December 2014 1 Texas Asset Texas Markets - Major December 2014 1 53 $ |
INVESTMENT ACTIVITY (Tables)
INVESTMENT ACTIVITY (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
INVESTMENT ACTIVITY | |
Schedule of revenue and earnings from acquisitions since the acquisition dates included in consolidated income statement | Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 (in thousands) Total revenue $ $ $ $ Net loss |
INVESTMENT IN UNCONSOLIDATED 27
INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURE (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURE | |
Summary of the financial position of the HHF venture | The following is a summary of the financial position of the HHF venture as of September 30, 2015 and December 31, 2014 (in thousands): September 30, December 31, 2015 2014 Assets Storage facilities, net $ $ Other assets Total assets $ $ Liabilities and equity Other liabilities $ $ Debt Equity CubeSmart Joint venture partner Total liabilities and equity $ $ |
Summary of results of operations of the Real Estate Venture | The following is a summary of results of operations of the real estate venture for the three and nine months ended September 30, 2015 and 2014 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Total revenues $ $ $ $ Operating expenses Interest expense, net Depreciation and amortization Net income (loss) $ $ $ $ Company’s share of net income (loss) $ $ $ $ |
MORTGAGE LOANS AND NOTES PAYA28
MORTGAGE LOANS AND NOTES PAYABLE (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
MORTGAGE LOANS AND NOTES PAYABLE | |
Summary of mortgage loans and notes payable | Carrying Value as of: September 30, December 31, Effective Maturity Mortgage Loans and Notes Payable 2015 2014 Interest Rate Date (in thousands) YSI 29 — % Aug-15 YSI 13 — % Oct-15 YSI 20 — % Nov-15 YSI 63 % Dec-15 YSI 59 % Mar-16 YSI 60 % Aug-16 YSI 51 % Sep-16 YSI 64 % Oct-16 YSI 62 % Dec-16 YSI 33 % Jul-19 YSI 26 % Nov-20 YSI 57 % Nov-20 YSI 55 % Jun-21 YSI 24 % Jun-21 YSI 65 — % Jun-23 Unamortized fair value adjustment Total mortgage loans and notes payable $ $ |
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 at September 30, 2015 (in thousands): 2015 $ 2016 2017 2018 2019 2020 and thereafter Total mortgage payments Plus: Unamortized fair value adjustment Total mortgage indebtedness $ |
ACCUMULATED OTHER COMPREHENSI29
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
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 nine months ended September 30, 2015 (in thousands): Unrealized losses Unrealized loss on on interest rate foreign currency swaps translation Total Balance at December 31, 2014 $ $ $ Other comprehensive loss before reclassifications Amounts reclassified from accumulated other comprehensive loss (a) — Net current-period other comprehensive income (loss) Balance at September 30, 2015 $ $ $ See note 10 for additional information about the effects of the amounts reclassified |
RISK MANAGEMENT AND USE OF FI30
RISK MANAGEMENT AND USE OF FINANCIAL INSTRUMENTS (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
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 at September 30, 2015 and December 31, 2014 , respectively (dollars in thousands): Hedge Notional Fair Value Product Hedge Type (a) Amount Strike Effective Date Maturity September 30, 2015 December 31, 2014 Swap Cash flow $ % 6/20/2011 6/20/2016 $ $ Swap Cash flow $ % 6/20/2011 6/20/2016 Swap Cash flow $ % 6/20/2011 6/20/2016 Swap Cash flow $ % 12/30/2011 3/31/2017 Swap Cash flow $ % 12/30/2011 3/31/2017 Swap Cash flow $ % 12/30/2011 3/31/2017 Swap Cash flow $ % 12/30/2011 3/31/2017 Swap Cash flow $ % 6/20/2011 6/20/2018 Swap Cash flow $ % 6/20/2011 6/20/2018 Swap Cash flow $ % 6/20/2011 6/20/2018 $ $ $ (a) Hedging unsecured variable rate debt by fixing 30 -day LIBOR. |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
FAIR VALUE MEASUREMENTS | |
Schedule of financial assets and liabilities carried at fair value | Financial assets and liabilities carried at fair value as of September 30, 2015 are classified in the table below in one of the three categories described above (in thousands): Level 1 Level 2 Level 3 Interest Rate Swap Derivative Liabilities $ — $ $ — Total liabilities at fair value $ — $ $ — Financial assets and liabilities carried at fair value as of December 31, 2014 are classified in the table below in one of the three categories described above (in thousands): Level 1 Level 2 Level 3 Interest Rate Swap Derivative Liabilities $ — $ $ — Total liabilities at fair value $ — $ $ — |
PRO FORMA FINANCIAL INFORMATI32
PRO FORMA FINANCIAL INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
PRO FORMA FINANCIAL INFORMATION | |
Schedule of consolidated results of operations on a pro forma basis | Nine Months Ended September 30, 2015 2014 (in thousands, except per share data) Pro forma revenue $ $ Pro forma income from continuing operations $ $ Earnings per common share from continuing operations: Basic - as reported $ $ Diluted - as reported $ $ Basic - as pro forma $ $ Diluted - as pro forma $ $ |
ORGANIZATION AND NATURE OF OP33
ORGANIZATION AND NATURE OF OPERATIONS (Details) | 9 Months Ended |
Sep. 30, 2015statesegment | |
ORGANIZATION AND NATURE OF OPERATIONS | |
Number of states in which self-storage facilities are located | 22 |
Number of reportable segments | segment | 1 |
Percentage of the entity's partnership interest in Operating Partnership | 98.70% |
Common stock, conversion ratio | 1 |
STORAGE FACILITIES - Summary (D
STORAGE FACILITIES - Summary (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
STORAGE FACILITIES | ||
Storage facilities | $ 3,323,554 | $ 3,117,198 |
Less: Accumulated depreciation | (569,493) | (492,069) |
Storage facilities, net (including VIE assets of $93,512 and $49,829, respectively) | 2,754,061 | 2,625,129 |
Land | ||
STORAGE FACILITIES | ||
Storage facilities | 562,037 | 545,393 |
Buildings and improvements | ||
STORAGE FACILITIES | ||
Storage facilities | 2,423,451 | 2,304,653 |
Equipment | ||
STORAGE FACILITIES | ||
Storage facilities | 234,928 | 218,731 |
Construction in progress | ||
STORAGE FACILITIES | ||
Storage facilities | $ 103,138 | $ 48,421 |
STORAGE FACILITIES - Activity (
STORAGE FACILITIES - Activity (Details) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015USD ($)property | Dec. 31, 2014USD ($)property | |
2015 Acquisitions | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | 16 | |
Purchase / Sales Price | $ | $ 168,188 | |
2015 Acquisitions | Texas Asset Seventeen | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | 1 | |
Purchase / Sales Price | $ | $ 7,295 | |
2015 Acquisitions | HSRE Assets Two | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | 4 | |
Purchase / Sales Price | $ | $ 27,500 | |
2015 Acquisitions | Texas Asset Eighteen | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | 1 | |
Purchase / Sales Price | $ | $ 15,795 | |
2015 Acquisitions | Florida Assets Eleven | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | 1 | |
Purchase / Sales Price | $ | $ 7,300 | |
2015 Acquisitions | Arizona Asset Six | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | 1 | |
Purchase / Sales Price | $ | $ 10,100 | |
2015 Acquisitions | Florida Assets Twelve | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | 1 | |
Purchase / Sales Price | $ | $ 10,500 | |
2015 Acquisitions | Texas Asset Eight | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | 1 | |
Purchase / Sales Price | $ | $ 14,200 | |
2015 Acquisitions | Maryland Asset Three | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | 1 | |
Purchase / Sales Price | $ | $ 17,000 | |
2015 Acquisitions | Maryland Asset Four | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | 1 | |
Purchase / Sales Price | $ | $ 19,200 | |
2015 Acquisitions | New York/New Jersey Assets | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | 2 | |
Purchase / Sales Price | $ | $ 24,823 | |
2015 Acquisitions | Arizona Asset Five | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | 1 | |
Purchase / Sales Price | $ | $ 7,900 | |
2015 Acquisitions | Tennessee Assets | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | 1 | |
Purchase / Sales Price | $ | $ 6,575 | |
2014 Acquisitions | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | 53 | |
Purchase / Sales Price | $ | $ 568,226 | |
2014 Acquisitions | Connecticut Asset | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | 1 | |
Purchase / Sales Price | $ | $ 4,950 | |
2014 Acquisitions | Florida Asset One | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | 1 | |
Purchase / Sales Price | $ | $ 14,000 | |
2014 Acquisitions | Florida Assets Two | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | 2 | |
Purchase / Sales Price | $ | $ 14,450 | |
2014 Acquisitions | California Asset | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | 1 | |
Purchase / Sales Price | $ | $ 8,300 | |
2014 Acquisitions | Maryland Asset One | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | 1 | |
Purchase / Sales Price | $ | $ 15,800 | |
2014 Acquisitions | Maryland Asset Two | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | 1 | |
Purchase / Sales Price | $ | $ 15,500 | |
2014 Acquisitions | Arizona Asset One | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | 1 | |
Purchase / Sales Price | $ | $ 14,750 | |
2014 Acquisitions | Pennsylvania Asset | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | 1 | |
Purchase / Sales Price | $ | $ 7,350 | |
2014 Acquisitions | Texas Asset One | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | 1 | |
Purchase / Sales Price | $ | $ 8,225 | |
2014 Acquisitions | Texas Asset Two | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | 1 | |
Purchase / Sales Price | $ | $ 6,450 | |
2014 Acquisitions | New York Asset One | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | 2 | |
Purchase / Sales Price | $ | $ 55,000 | |
2014 Acquisitions | Florida Asset Three | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | 1 | |
Purchase / Sales Price | $ | $ 11,406 | |
2014 Acquisitions | Massachusetts Asset One | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | 1 | |
Purchase / Sales Price | $ | $ 11,100 | |
2014 Acquisitions | Indiana Asset | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | 1 | |
Purchase / Sales Price | $ | $ 8,400 | |
2014 Acquisitions | Florida Assets Four | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | 3 | |
Purchase / Sales Price | $ | $ 35,000 | |
2014 Acquisitions | Florida Assets Five | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | 2 | |
Purchase / Sales Price | $ | $ 15,800 | |
2014 Acquisitions | Massachusetts Asset Two | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | 1 | |
Purchase / Sales Price | $ | $ 23,100 | |
2014 Acquisitions | Texas Asset Three | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | 1 | |
Purchase / Sales Price | $ | $ 7,700 | |
2014 Acquisitions | Texas Asset Four | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | 1 | |
Purchase / Sales Price | $ | $ 8,500 | |
2014 Acquisitions | Texas Asset Five | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | 1 | |
Purchase / Sales Price | $ | $ 7,750 | |
2014 Acquisitions | HSRE Assets | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | 22 | |
Purchase / Sales Price | $ | $ 195,500 | |
2014 Acquisitions | Texas Asset Six | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | 1 | |
Purchase / Sales Price | $ | $ 18,650 | |
2014 Acquisitions | Florida Assets Six | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | 3 | |
Purchase / Sales Price | $ | $ 18,200 | |
2014 Acquisitions | New York Asset Two | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | 1 | |
Purchase / Sales Price | $ | $ 38,000 | |
2014 Acquisitions | Texas Asset Seven | ||
STORAGE FACILITIES | ||
Number of Facilities, acquisitions (in properties) | 1 | |
Purchase / Sales Price | $ | $ 4,345 |
INVESTMENT ACTIVITY (Details)
INVESTMENT ACTIVITY (Details) | Mar. 18, 2015USD ($)facility | Nov. 03, 2014USD ($)facility | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)facilityproperty | Sep. 30, 2014USD ($) | Dec. 31, 2014USD ($)facilityproperty | Dec. 31, 2008 | Mar. 31, 2014USD ($) | Dec. 31, 2013USD ($) |
Self-storage facilities | ||||||||||
Development costs | $ 85,300,000 | $ 85,300,000 | ||||||||
Storage facilities | 3,323,554,000 | 3,323,554,000 | $ 3,117,198,000 | |||||||
Number of facilities under contract | 5 | |||||||||
Gain from sale of real estate | $ 475,000 | |||||||||
Summary of the amounts of revenue and earnings of the 2014 and 2013 acquisitions since the acquisition dates | ||||||||||
Total revenue | 3,157,000 | $ 5,832,000 | 4,901,000 | 11,032,000 | ||||||
Net loss | (2,048,000) | $ (3,235,000) | $ (3,172,000) | $ (6,149,000) | ||||||
USIFB, LLP | ||||||||||
Self-storage facilities | ||||||||||
Ownership interest held by the entity (as a percent) | 97.00% | |||||||||
5 Old Lancaster Road located in Malvern, PA | ||||||||||
Self-storage facilities | ||||||||||
Storage facilities | $ 25,100,000 | |||||||||
Bronx, NY | ||||||||||
Self-storage facilities | ||||||||||
Development costs | $ 17,200,000 | |||||||||
Self-storage facilities located in Newyork | ||||||||||
Self-storage facilities | ||||||||||
Number of self-storage facilities | facility | 4 | |||||||||
Self-storage Facility in Washington D C [Member] | ||||||||||
Self-storage facilities | ||||||||||
Number of self-storage facilities | facility | 1 | |||||||||
Self-storage Facility in Arlington, VA [Member] | ||||||||||
Self-storage facilities | ||||||||||
Storage facilities | $ 17,100,000 | $ 17,100,000 | ||||||||
Ownership interest held by the entity (as a percent) | 90.00% | |||||||||
2015 Acquisitions | ||||||||||
Self-storage facilities | ||||||||||
Number of self-storage facilities acquired (in properties) | property | 16 | |||||||||
Aggregate purchase or sale price | $ 168,188,000 | $ 168,188,000 | ||||||||
2015 Acquisitions | HSRE | ||||||||||
Self-storage facilities | ||||||||||
Number of self-storage facilities | facility | 26 | |||||||||
Number of self-storage facilities acquired (in properties) | facility | 4 | 22 | ||||||||
Aggregate purchase or sale price | $ 223,000,000 | |||||||||
Intangible value of the in-place leases | 2,700,000 | $ 2,700,000 | ||||||||
Estimated life | 12 months | |||||||||
Amortization expense | $ 1,300,000 | |||||||||
Aggregate purchase price of facilities closed | $ 27,500,000 | $ 195,500,000 | ||||||||
2015 Acquisitions | Self-storage facilities located in US | ||||||||||
Self-storage facilities | ||||||||||
Number of self-storage facilities acquired (in properties) | facility | 12 | |||||||||
Aggregate purchase or sale price | 140,700,000 | $ 140,700,000 | ||||||||
Intangible value of the in-place leases | 9,300,000 | $ 9,300,000 | ||||||||
Estimated life | 12 months | |||||||||
Amortization expense | $ 2,200,000 | |||||||||
Number of properties, assumed mortgage | facility | 1 | |||||||||
Assumed mortgage debt, at fair value | 2,700,000 | $ 2,700,000 | ||||||||
Outstanding principal balance of mortgage debt assumed on acquisitions | 2,500,000 | 2,500,000 | ||||||||
Premium on debt assumed on acquisitions | 200,000 | 200,000 | ||||||||
2014 Acquisitions | ||||||||||
Self-storage facilities | ||||||||||
Number of self-storage facilities acquired (in properties) | property | 53 | |||||||||
Aggregate purchase or sale price | $ 568,226,000 | |||||||||
2014 Acquisitions | Self-storage facilities located in US | ||||||||||
Self-storage facilities | ||||||||||
Number of self-storage facilities acquired (in properties) | facility | 31 | |||||||||
Aggregate purchase or sale price | $ 372,700,000 | |||||||||
Intangible value of the in-place leases | $ 23,800,000 | |||||||||
Estimated life | 12 months | |||||||||
Amortization expense | 9,800,000 | |||||||||
Number of properties, assumed mortgage | facility | 4 | |||||||||
Assumed mortgage debt, at fair value | $ 27,500,000 | |||||||||
Outstanding principal balance of mortgage debt assumed on acquisitions | 26,000,000 | |||||||||
Premium on debt assumed on acquisitions | $ 1,500,000 | |||||||||
2014 Acquisitions | Self-storage facilities located in US | HSRE | ||||||||||
Self-storage facilities | ||||||||||
Number of self-storage facilities acquired (in properties) | facility | 22 | |||||||||
Aggregate purchase or sale price | $ 195,500,000 | |||||||||
Intangible value of the in-place leases | $ 14,500,000 | |||||||||
Estimated life | 12 months | |||||||||
Amortization expense | 10,900,000 | |||||||||
Real Estate Acquisition Expected by 2016 | ||||||||||
Self-storage facilities | ||||||||||
Deposit | 5,100,000 | 5,100,000 | ||||||||
Number of facilities under contract | 4 | |||||||||
Expected aggregate purchase or sales price | 90,200,000 | 90,200,000 | ||||||||
Note receivable | 4,100,000 | $ 4,100,000 | ||||||||
Self-storage facilities | ||||||||||
Self-storage facilities | ||||||||||
Number of self-storage facilities acquired (in properties) | property | 16 | 53 | ||||||||
Aggregate purchase or sale price | $ 168,200,000 | $ 168,200,000 | $ 568,200,000 |
INVESTMENT IN UNCONSOLIDATED 37
INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURE (Details) $ in Thousands | May. 01, 2014USD ($)property | Dec. 10, 2013USD ($)property | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Dec. 31, 2014USD ($) |
Summary of results of operations of the real estate venture | |||||||
Total revenues | $ 6,874 | $ 22,346 | |||||
Operating expenses | 3,108 | 9,272 | |||||
Interest expense, net | 941 | 2,793 | |||||
Depreciation and amortization | 6,544 | 10,679 | |||||
Net income (loss) | (3,719) | (398) | |||||
Company’s share of net income (loss) | $ 139 | $ (1,860) | (199) | $ (4,958) | |||
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 | ||||||
Assets | |||||||
Storage facilities, net | 281,533 | 281,533 | $ 291,357 | ||||
Other assets | 5,380 | 5,380 | 5,786 | ||||
Total Assets | 286,913 | 286,913 | 297,143 | ||||
Liabilities and equity | |||||||
Other liabilities | 5,263 | 5,263 | 5,725 | ||||
Debt | 100,000 | 100,000 | 100,000 | ||||
Equity | |||||||
CubeSmart | 90,825 | 90,825 | 95,709 | ||||
Joint venture partner | 90,825 | 90,825 | 95,709 | ||||
Total liabilities and equity | 286,913 | $ 286,913 | $ 297,143 | ||||
Summary of results of operations of the real estate venture | |||||||
Total revenues | 7,821 | 19,894 | |||||
Operating expenses | 3,045 | 8,729 | |||||
Interest expense, net | 931 | 1,552 | |||||
Depreciation and amortization | 3,567 | 19,529 | |||||
Net income (loss) | 278 | (9,916) | |||||
Company’s share of net income (loss) | $ 139 | $ (4,958) | |||||
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 | Facilitates located in Texas | |||||||
Investment in Unconsolidated Real Estate Venture | |||||||
Number of storage facilities owned by investee | property | 34 | 34 | |||||
HHF | Facilitates located in North Carolina | |||||||
Investment in Unconsolidated Real Estate Venture | |||||||
Number of storage facilities owned by investee | property | 1 |
UNSECURED SENIOR NOTES (Details
UNSECURED SENIOR NOTES (Details) $ in Millions | 9 Months Ended | ||
Sep. 30, 2015 | Dec. 17, 2013USD ($) | Jun. 26, 2012USD ($) | |
Senior notes 4.375% due December 15, 2023 | |||
Mortgage loans and Notes payable | |||
Senior notes, principal amount | $ 250 | ||
Interest rate (as a percent) | 4.375% | ||
Senior notes 4.375% due December 15, 2023 | Maximum | |||
Mortgage loans and Notes payable | |||
Consolidated leverage ratio | 0.60 | ||
Secured debt leverage ratio | 0.40 | ||
Senior notes 4.375% due December 15, 2023 | 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 4.80% due July 15, 2022 | |||
Mortgage loans and Notes payable | |||
Senior notes, principal amount | $ 250 | ||
Interest rate (as a percent) | 4.80% | ||
Senior notes 4.80% due July 15, 2022 | Maximum | |||
Mortgage loans and Notes payable | |||
Consolidated leverage ratio | 0.60 | ||
Secured debt leverage ratio | 0.40 | ||
Senior notes 4.80% due July 15, 2022 | Minimum | |||
Mortgage loans and Notes payable | |||
Consolidated interest coverage ratio | 1.50 | ||
Financial and customary covenant, minimum unencumbered asset (as a percent) | 150.00% |
REVOLVING CREDIT FACILITY AND39
REVOLVING CREDIT FACILITY AND UNSECURED TERM LOANS (Details) | Apr. 22, 2015USD ($) | Apr. 21, 2015USD ($) | Dec. 17, 2013USD ($) | Jun. 20, 2011USD ($) | Sep. 30, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 09, 2011USD ($) |
SECURED CREDIT FACILITY, UNSECURED CREDIT FACILITY AND SECURED TERM LOANS | |||||||
Unsecured term loan borrowings outstanding | $ 400,000,000 | $ 400,000,000 | |||||
Term Loan Facility | |||||||
SECURED CREDIT FACILITY, UNSECURED CREDIT FACILITY AND SECURED TERM LOANS | |||||||
Loan procurement costs capitalized | $ 2,300,000 | ||||||
Net proceeds from equity issuances added to minimum tangible net worth (as a percent) | 75.00% | ||||||
Term Loan Facility | Minimum | |||||||
SECURED CREDIT FACILITY, UNSECURED CREDIT FACILITY AND SECURED TERM LOANS | |||||||
Fixed charge coverage ratio | 1.50 | ||||||
Tangible net worth | $ 821,211,200 | ||||||
Term Loan Facility | Maximum | |||||||
SECURED CREDIT FACILITY, UNSECURED CREDIT FACILITY AND SECURED TERM LOANS | |||||||
Total indebtedness to total asset value ratio (as a percent) | 60.00% | ||||||
Percentage of funds from operations that can be distributed on common shares | 95.00% | ||||||
Term Loan Facility | Term Loan A | |||||||
SECURED CREDIT FACILITY, UNSECURED CREDIT FACILITY AND SECURED TERM LOANS | |||||||
Maximum borrowing capacity | $ 100,000,000 | ||||||
Term of debt instrument | 5 years | ||||||
Term Loan Facility | Term Loan A | Baa2/BBB | |||||||
SECURED CREDIT FACILITY, UNSECURED CREDIT FACILITY AND SECURED TERM LOANS | |||||||
Interest rate, basis spread (as a percent) | 1.30% | ||||||
Variable interest rate basis | LIBOR | ||||||
Term Loan Facility | Term Loan B | |||||||
SECURED CREDIT FACILITY, UNSECURED CREDIT FACILITY AND SECURED TERM LOANS | |||||||
Maximum borrowing capacity | $ 100,000,000 | ||||||
Term of debt instrument | 7 years | ||||||
Term Loan Facility | Term Loan B | Baa2/BBB | |||||||
SECURED CREDIT FACILITY, UNSECURED CREDIT FACILITY AND SECURED TERM LOANS | |||||||
Interest rate, basis spread (as a percent) | 1.15% | ||||||
Variable interest rate basis | LIBOR | ||||||
Term Loan Facility | Unsecured term loan | |||||||
SECURED CREDIT FACILITY, UNSECURED CREDIT FACILITY AND SECURED TERM LOANS | |||||||
Unsecured term loan borrowings outstanding | $ 200,000,000 | ||||||
Credit Facility | |||||||
SECURED CREDIT FACILITY, UNSECURED CREDIT FACILITY AND SECURED TERM LOANS | |||||||
Effective weighted average interest rate (as a percent) | 2.54% | ||||||
Net proceeds from equity issuances added to minimum tangible net worth (as a percent) | 75.00% | ||||||
Credit Facility | Minimum | |||||||
SECURED CREDIT FACILITY, UNSECURED CREDIT FACILITY AND SECURED TERM LOANS | |||||||
Fixed charge coverage ratio | 1.50 | ||||||
Tangible net worth | $ 821,211,200 | ||||||
Credit Facility | Maximum | |||||||
SECURED CREDIT FACILITY, UNSECURED CREDIT FACILITY AND SECURED TERM LOANS | |||||||
Total indebtedness to total asset value ratio (as a percent) | 60.00% | ||||||
Percentage of funds from operations that can be distributed on common shares | 95.00% | ||||||
Credit Facility | Revolver | |||||||
SECURED CREDIT FACILITY, UNSECURED CREDIT FACILITY AND SECURED TERM LOANS | |||||||
Maximum borrowing capacity | $ 500,000,000 | $ 300,000,000 | $ 300,000,000 | ||||
Interest rate, basis spread (as a percent) | 1.25% | ||||||
Variable interest rate basis | LIBOR | ||||||
Facility fee (as a percent) | 0.15% | 0.20% | 0.15% | ||||
Unsecured term loan borrowings outstanding | $ 167,800,000 | ||||||
Remaining borrowing capacity | 332,200,000 | ||||||
Outstanding letter of credit | $ 30,000 | ||||||
Credit Facility | Term Loan C | |||||||
SECURED CREDIT FACILITY, UNSECURED CREDIT FACILITY AND SECURED TERM LOANS | |||||||
Maximum borrowing capacity | 100,000,000 | ||||||
Repayment of outstanding debt | $ 100,000,000 | ||||||
Credit Facility | Term Loan D | |||||||
SECURED CREDIT FACILITY, UNSECURED CREDIT FACILITY AND SECURED TERM LOANS | |||||||
Maximum borrowing capacity | $ 200,000,000 | ||||||
Interest rate, basis spread (as a percent) | 1.30% | ||||||
Credit Facility | Unsecured term loan | |||||||
SECURED CREDIT FACILITY, UNSECURED CREDIT FACILITY AND SECURED TERM LOANS | |||||||
Unsecured term loan borrowings outstanding | $ 200,000,000 |
MORTGAGE LOANS AND NOTES PAYA40
MORTGAGE LOANS AND NOTES PAYABLE - Summary (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Mortgage loans and Notes payable | ||
Carrying value | $ 117,970 | |
Plus: Unamortized fair value adjustment | 2,474 | $ 3,484 |
Total mortgage loans and notes payable | 120,444 | 195,851 |
Net book value of self-storage facilities | $ 2,754,061 | 2,625,129 |
YSI 29 | ||
Mortgage loans and Notes payable | ||
Carrying value | 12,635 | |
Effective interest rate (as a percent) | 3.69% | |
YSI 13 | ||
Mortgage loans and Notes payable | ||
Carrying value | 8,427 | |
Effective interest rate (as a percent) | 3.00% | |
YSI 20 | ||
Mortgage loans and Notes payable | ||
Carrying value | 54,091 | |
Effective interest rate (as a percent) | 5.97% | |
YSI 63 | ||
Mortgage loans and Notes payable | ||
Carrying value | $ 7,386 | 7,466 |
Effective interest rate (as a percent) | 2.82% | |
YSI 59 | ||
Mortgage loans and Notes payable | ||
Carrying value | $ 9,066 | 9,221 |
Effective interest rate (as a percent) | 4.82% | |
YSI 60 | ||
Mortgage loans and Notes payable | ||
Carrying value | $ 3,563 | 3,610 |
Effective interest rate (as a percent) | 5.04% | |
YSI 51 | ||
Mortgage loans and Notes payable | ||
Carrying value | $ 7,016 | 7,105 |
Effective interest rate (as a percent) | 5.15% | |
YSI 64 | ||
Mortgage loans and Notes payable | ||
Carrying value | $ 7,817 | 7,919 |
Effective interest rate (as a percent) | 3.54% | |
YSI 62 | ||
Mortgage loans and Notes payable | ||
Carrying value | $ 7,867 | 7,962 |
Effective interest rate (as a percent) | 3.54% | |
YSI 33 | ||
Mortgage loans and Notes payable | ||
Carrying value | $ 10,224 | 10,429 |
Effective interest rate (as a percent) | 6.42% | |
YSI 26 | ||
Mortgage loans and Notes payable | ||
Carrying value | $ 8,651 | 8,780 |
Effective interest rate (as a percent) | 4.56% | |
YSI 57 | ||
Mortgage loans and Notes payable | ||
Carrying value | $ 3,037 | 3,082 |
Effective interest rate (as a percent) | 4.61% | |
YSI 55 | ||
Mortgage loans and Notes payable | ||
Carrying value | $ 23,471 | 23,767 |
Effective interest rate (as a percent) | 4.85% | |
YSI 24 | ||
Mortgage loans and Notes payable | ||
Carrying value | $ 27,361 | 27,873 |
Effective interest rate (as a percent) | 4.64% | |
Mortgage Loans | ||
Mortgage loans and Notes payable | ||
Net book value of self-storage facilities | $ 211,700 | $ 344,200 |
YSI 65 | ||
Mortgage loans and Notes payable | ||
Carrying value | $ 2,511 | |
Effective interest rate (as a percent) | 3.85% |
MORTGAGE LOANS AND NOTES PAYA41
MORTGAGE LOANS AND NOTES PAYABLE - Future Payments (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Future principal payment requirements on the outstanding mortgage loans and notes payable at year end | ||
2,015 | $ 7,976 | |
2,016 | 36,880 | |
2,017 | 1,830 | |
2,018 | 1,934 | |
2,019 | 10,902 | |
2020 and thereafter | 58,448 | |
Total mortgage payments | 117,970 | |
Plus: Unamortized fair value adjustment | 2,474 | $ 3,484 |
Total mortgage indebtedness | $ 120,444 | $ 195,851 |
ACCUMULATED OTHER COMPREHENSI42
ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Changes in accumulated other comprehensive income by component | |
Beginning balance | $ (8,759) |
Other comprehensive loss before reclassifications | (4,716) |
Amounts reclassified from accumulated other comprehensive loss | 4,651 |
Net current-period other comprehensive income (loss) | (65) |
Ending balance | (8,824) |
Unrealized losses on interest rate swaps | |
Changes in accumulated other comprehensive income by component | |
Beginning balance | (7,795) |
Other comprehensive loss before reclassifications | (4,448) |
Amounts reclassified from accumulated other comprehensive loss | 4,651 |
Net current-period other comprehensive income (loss) | 203 |
Ending balance | (7,592) |
Unrealized loss on foreign currency translation | |
Changes in accumulated other comprehensive income by component | |
Beginning balance | (964) |
Other comprehensive loss before reclassifications | (268) |
Net current-period other comprehensive income (loss) | (268) |
Ending balance | $ (1,232) |
RISK MANAGEMENT AND USE OF FI43
RISK MANAGEMENT AND USE OF FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Dec. 31, 2014 | |
Derivative financial instruments | ||
Unrealized losses reclassified from accumulated other comprehensive loss | $ 4,700 | |
Amount estimated to be reclassified as an increase to interest expense | 5,100 | |
Designated | Cash flow | ||
Derivative financial instruments | ||
Notional Amount | 400,000 | |
Fair Value | $ (8,093) | $ (8,299) |
Maximum number of days outstanding to have the option to borrow at the LIBOR | 30 days | |
Designated | Cash flow | Hedge Product, Swap one | ||
Derivative financial instruments | ||
Notional Amount | $ 40,000 | |
Swap, Strike rate (as a percent) | 1.8025% | |
Fair Value | $ (429) | (757) |
Designated | Cash flow | Hedge Product, Swap two | ||
Derivative financial instruments | ||
Notional Amount | $ 40,000 | |
Swap, Strike rate (as a percent) | 1.8025% | |
Fair Value | $ (429) | (757) |
Designated | Cash flow | Hedge Product, Swap three | ||
Derivative financial instruments | ||
Notional Amount | $ 20,000 | |
Swap, Strike rate (as a percent) | 1.8025% | |
Fair Value | $ (215) | (378) |
Designated | Cash flow | Hedge Product, Swap four | ||
Derivative financial instruments | ||
Notional Amount | $ 75,000 | |
Swap, Strike rate (as a percent) | 1.336% | |
Fair Value | $ (930) | (841) |
Designated | Cash flow | Hedge Product, Swap five | ||
Derivative financial instruments | ||
Notional Amount | $ 50,000 | |
Swap, Strike rate (as a percent) | 1.336% | |
Fair Value | $ (620) | (561) |
Designated | Cash flow | Hedge Product, Swap six | ||
Derivative financial instruments | ||
Notional Amount | $ 50,000 | |
Swap, Strike rate (as a percent) | 1.336% | |
Fair Value | $ (620) | (561) |
Designated | Cash flow | Hedge Product, Swap seven | ||
Derivative financial instruments | ||
Notional Amount | $ 25,000 | |
Swap, Strike rate (as a percent) | 1.3375% | |
Fair Value | $ (311) | (281) |
Designated | Cash flow | Hedge Product, Swap eight | ||
Derivative financial instruments | ||
Notional Amount | $ 40,000 | |
Swap, Strike rate (as a percent) | 2.459% | |
Fair Value | $ (1,806) | (1,654) |
Designated | Cash flow | Hedge Product, Swap nine | ||
Derivative financial instruments | ||
Notional Amount | $ 40,000 | |
Swap, Strike rate (as a percent) | 2.4725% | |
Fair Value | $ (1,821) | (1,672) |
Designated | Cash flow | Hedge Product, Swap ten | ||
Derivative financial instruments | ||
Notional Amount | $ 20,000 | |
Swap, Strike rate (as a percent) | 2.475% | |
Fair Value | $ (912) | $ (837) |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015USD ($)item | Dec. 31, 2014USD ($) | |
Fair value of financial assets and liabilities carried at fair value | ||
Aggregate carrying value of total debt | $ 1,200,000 | $ 1,200,000 |
Estimated fair value of total debt | $ 1,200,000 | 1,200,000 |
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 2014 | item | 0 | |
Level 2 | ||
Fair value of financial assets and liabilities carried at fair value | ||
Total liabilities at fair value | $ 8,093 | 8,299 |
Level 2 | Interest rate swap | ||
Fair value of financial assets and liabilities carried at fair value | ||
Derivative Liabilities | $ 8,093 | $ 8,299 |
NONCONTROLLING INTERESTS - Inte
NONCONTROLLING INTERESTS - Interests in Consolidated Real Estate Joint Ventures (Details) $ in Thousands, £ in Millions | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2015USD ($)property | Sep. 30, 2014USD ($) | Dec. 31, 2014USD ($)item | Dec. 31, 2013USD ($) | Dec. 31, 2008property | Dec. 31, 2013GBP (£) | Dec. 31, 2013USD ($) | |
Interests in Consolidated Real Estate Joint Ventures | |||||||
Gain (loss) from sale of land | $ 475 | ||||||
Proceeds from sales of facilities, net | 13,475 | ||||||
Reduction to additional paid in capital | $ 178 | $ 595 | |||||
Tilloston Ave | |||||||
Interests in Consolidated Real Estate Joint Ventures | |||||||
Option to put ownership interest in the venture | $ 17,000 | ||||||
Period of option to call ownership interest of another member | 1 year | ||||||
Period of option to put ownership interest in venture | 1 year | ||||||
Option to call ownership interest of another member | $ 17,000 | ||||||
Accretion liability | 17,000 | ||||||
Accrued accretion expenses | $ 9,700 | ||||||
Ownership interest held by the entity (as a percent) | 51.00% | ||||||
Total assets | $ 14,600 | ||||||
Total liabilities | $ 11,300 | ||||||
Minority ownership interest (as a percent) | 49.00% | ||||||
Jamaica Ave | |||||||
Interests in Consolidated Real Estate Joint Ventures | |||||||
Accretion liability | $ 12,500 | ||||||
Accrued accretion expenses | 10,100 | ||||||
Total liabilities | 11,700 | ||||||
USIFB, LLP | |||||||
Interests in Consolidated Real Estate Joint Ventures | |||||||
Ownership interest held by the entity (as a percent) | 97.00% | ||||||
Number of self-storage facilities owned and operated | property | 2 | ||||||
Total assets | 5,300 | ||||||
Total liabilities | $ 200 | ||||||
Carrying amount of mortgage loans | £ 4.1 | $ 6,800 | |||||
SRLLC | |||||||
Interests in Consolidated Real Estate Joint Ventures | |||||||
Ownership interest held by the entity (as a percent) | 90.00% | ||||||
Total assets | $ 17,100 | ||||||
Total liabilities | 13,400 | ||||||
Carrying amount of mortgage loans | 13,100 | ||||||
Amount of mortgage loan commitment | $ 14,600 | ||||||
Payments to acquire land for development | $ 13,100 | ||||||
Number of parcels in which the subdivision of land is done reporting period | item | 2 | ||||||
Number of parcel sold | item | 1 | ||||||
Proceeds from sales of facilities, net | $ 6,500 | ||||||
SNL | |||||||
Interests in Consolidated Real Estate Joint Ventures | |||||||
Ownership interest held by the entity (as a percent) | 90.00% | ||||||
Number of self-storage facilities owned and operated | property | 2 | ||||||
Total assets | $ 26,000 | ||||||
Total liabilities | 14,200 | ||||||
Carrying amount of mortgage loans | 12,600 | ||||||
Amount of mortgage loan commitment | $ 22,600 | ||||||
Jamaica Ave | |||||||
Interests in Consolidated Real Estate Joint Ventures | |||||||
Period of option to call ownership interest of another member | 1 year | ||||||
Option to call ownership interest of another member | $ 12,500 | ||||||
Ownership interest held by the entity (as a percent) | 51.00% | ||||||
Total assets | $ 26,100 | ||||||
Minority ownership interest (as a percent) | 49.00% | ||||||
Jamaica Ave | Jamaica Ave | |||||||
Interests in Consolidated Real Estate Joint Ventures | |||||||
Option to put ownership interest in the venture | $ 12,500 | ||||||
Period of option to put ownership interest in venture | 1 year |
NONCONTROLLING INTERESTS - Oper
NONCONTROLLING INTERESTS - Operating Partnership Ownership (Details) - USD ($) $ in Thousands | May. 14, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 |
Operating Partnership Ownership | ||||
OP units issued (in shares) | 20,408 | |||
Issuance of OP Units | $ 500 | |||
Additional consideration to be paid upon the completion of certain milestones within a specified period from closing | $ 1,500 | |||
Acrrued liability relating to the additional consideration to be paid in the acquisition of real property | $ 600 | |||
Increase to OP units owned by third parties and a corresponding decrease to capital | $ 12,166 | $ 5,218 | $ 14,800 | |
CubeSmart, L.P. and Subsidiaries | ||||
Operating Partnership Ownership | ||||
OP Units outstanding which are not owned by the general partner (as a percent) | 1.30% | 1.40% | ||
Number of trading days used to determine average of the closing prices of the common shares | 10 days | |||
OP units outstanding (in shares) | 2,211,650 | 2,257,486 | ||
Increase to OP units owned by third parties and a corresponding decrease to capital | $ 12,166 | $ 5,218 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - Affiliated Real Estate Investment Transactions [Member] - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
RELATED PARTY TRANSACTIONS | |||||
Management fees | $ 0.2 | $ 0.2 | $ 0.7 | $ 0.6 | |
Amounts due to the Company from related parties | 1.4 | 1.4 | $ 1.6 | ||
Mortgage loans receivable from consolidated joint ventures | $ 25.7 | $ 25.7 | $ 10.8 | ||
Minimum | |||||
RELATED PARTY TRANSACTIONS | |||||
Management fee (as a percent) | 5.00% | ||||
Maximum | |||||
RELATED PARTY TRANSACTIONS | |||||
Management fee (as a percent) | 6.00% |
DISCONTINUED OPERATIONS (Detail
DISCONTINUED OPERATIONS (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended |
Jun. 30, 2015 | Jun. 30, 2015 | Sep. 30, 2014 | |
DISCONTINUED OPERATIONS | |||
Total discontinued operations | $ 336 | ||
Discontinued operations | |||
DISCONTINUED OPERATIONS | |||
Total discontinued operations | $ 0 | $ 0 | $ 300 |
PRO FORMA FINANCIAL INFORMATI49
PRO FORMA FINANCIAL INFORMATION (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2015USD ($)$ / shares | Sep. 30, 2014$ / shares | Sep. 30, 2015USD ($)property$ / shares | Sep. 30, 2014USD ($)$ / shares | Dec. 31, 2014USD ($)property | |
Consolidated results of operations on a pro forma basis | |||||
Pro forma revenue | $ | $ 335,737 | $ 314,488 | |||
Pro forma income from continuing operations | $ | $ 67,997 | $ 31,137 | |||
Earnings per share from continuing operations: | |||||
Basic - as reported (in dollars per share) | $ 0.10 | $ 0.05 | $ 0.22 | $ 0.11 | |
Diluted - as reported (in dollars per share) | $ 0.10 | $ 0.05 | 0.21 | 0.11 | |
Basic - as pro forma (in dollars per share) | 0.38 | 0.18 | |||
Diluted - as pro forma (in dollars per share) | $ 0.37 | $ 0.18 | |||
Self-storage facilities | |||||
Self-storage facilities | |||||
Number of self-storage facilities acquired (in properties) | property | 16 | 53 | |||
Aggregate purchase or sale price | $ | $ 168,200 | $ 168,200 | $ 568,200 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Subsequent event $ in Millions | Oct. 08, 2015USD ($)item | Oct. 26, 2015USD ($) | Oct. 02, 2015USD ($) |
Texas | |||
Subsequent Events | |||
Number or assets sold | item | 7 | ||
Florida | |||
Subsequent Events | |||
Number or assets sold | item | 1 | ||
Unsecured Senior Notes, 4.00 Percent, Due November 2025 | |||
Subsequent Events | |||
Debt issued | $ 250 | ||
Interest rate (as a percent) | 4.00% | ||
Asset in London, England | USIFB | |||
Subsequent Events | |||
Sale of asset, consideration | $ 9.3 | ||
Assets in Texas and Florida, October 2015 Transaction | |||
Subsequent Events | |||
Sale of asset, consideration | $ 37.8 |
CONSOLIDATED BALANCE SHEETS (LP
CONSOLIDATED BALANCE SHEETS (LP cube) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
ASSETS | ||
Storage facilities | $ 3,323,554 | $ 3,117,198 |
Less: Accumulated depreciation | (569,493) | (492,069) |
Storage facilities, net (including VIE assets of $93,512 and $49,829, respectively) | 2,754,061 | 2,625,129 |
Cash and cash equivalents | 3,018 | 2,901 |
Restricted cash | 2,746 | 3,305 |
Loan procurement costs, net of amortization | 11,240 | 10,653 |
Investment in real estate venture, at equity | 90,825 | 95,709 |
Other assets held for sale | 27,505 | |
Other assets, net | 40,511 | 48,642 |
Total assets | 2,929,906 | 2,786,339 |
LIABILITIES AND CAPITAL | ||
Unsecured senior notes | 500,000 | 500,000 |
Revolving credit facility | 167,800 | 78,000 |
Unsecured term loan | 400,000 | 400,000 |
Mortgage loans and notes payable | 120,444 | 195,851 |
Accounts payable, accrued expenses and other liabilities | 88,259 | 69,198 |
Distributions payable | 29,241 | 28,137 |
Deferred revenue | 17,079 | 15,311 |
Security deposits | 393 | 401 |
Other liabilities held for sale | 725 | |
Total liabilities | 1,323,941 | 1,286,898 |
Limited Partnership interests of third parties | $ 60,180 | $ 49,823 |
Commitments and contingencies | ||
Capital | ||
Accumulated other comprehensive loss | $ (8,824) | $ (8,759) |
Total liabilities and equity | 2,929,906 | 2,786,339 |
CubeSmart, L.P. and Subsidiaries | ||
ASSETS | ||
Storage facilities | 3,323,554 | 3,117,198 |
Less: Accumulated depreciation | (569,493) | (492,069) |
Storage facilities, net (including VIE assets of $93,512 and $49,829, respectively) | 2,754,061 | 2,625,129 |
Cash and cash equivalents | 3,018 | 2,901 |
Restricted cash | 2,746 | 3,305 |
Loan procurement costs, net of amortization | 11,240 | 10,653 |
Investment in real estate venture, at equity | 90,825 | 95,709 |
Other assets held for sale | 27,505 | |
Other assets, net | 40,511 | 48,642 |
Total assets | 2,929,906 | 2,786,339 |
LIABILITIES AND CAPITAL | ||
Unsecured senior notes | 500,000 | 500,000 |
Revolving credit facility | 167,800 | 78,000 |
Unsecured term loan | 400,000 | 400,000 |
Mortgage loans and notes payable | 120,444 | 195,851 |
Accounts payable, accrued expenses and other liabilities | 88,259 | 69,198 |
Distributions payable | 29,241 | 28,137 |
Deferred revenue | 17,079 | 15,311 |
Security deposits | 393 | 401 |
Other liabilities held for sale | 725 | |
Total liabilities | 1,323,941 | 1,286,898 |
Limited Partnership interests of third parties | 60,180 | 49,823 |
Capital | ||
Operating Partner | 1,552,906 | 1,456,785 |
Accumulated other comprehensive loss | (8,824) | (8,759) |
Total CubeSmart, L.P. capital | 1,544,082 | 1,448,026 |
Noncontrolling interests in subsidiaries | 1,703 | 1,592 |
Total capital | 1,545,785 | 1,449,618 |
Total liabilities and equity | $ 2,929,906 | $ 2,786,339 |
CONSOLIDATED BALANCE SHEETS (52
CONSOLIDATED BALANCE SHEETS (Parenthetical) (LP cube) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Storage facilities, net | $ 2,754,061 | $ 2,625,129 |
VIE | ||
Storage facilities, net | 93,512 | 49,829 |
CubeSmart, L.P. and Subsidiaries | ||
Storage facilities, net | $ 2,754,061 | $ 2,625,129 |
CONSOLIDATED STATEMENTS OF OP53
CONSOLIDATED STATEMENTS OF OPERATIONS (LP cube) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
REVENUES | ||||
Rental income | $ 102,385 | $ 85,392 | $ 290,744 | $ 242,177 |
Other property related income | 11,827 | 10,142 | 33,755 | 30,088 |
Property management fee income | 1,758 | 1,558 | 5,030 | 4,431 |
Total revenues | 115,970 | 97,092 | 329,529 | 276,696 |
OPERATING EXPENSES | ||||
Property operating expenses | 39,297 | 33,622 | 114,938 | 97,992 |
Depreciation and amortization | 38,744 | 31,622 | 114,725 | 90,224 |
General and administrative | 7,002 | 7,464 | 21,289 | 21,092 |
Acquisition related costs | 1,222 | 1,258 | 2,485 | 3,658 |
Total operating expenses | 86,265 | 73,966 | 253,437 | 212,966 |
OPERATING (EXPENSE) INCOME | 29,705 | 23,126 | 76,092 | 63,730 |
Interest: | ||||
Interest expense on loans | (10,399) | (11,772) | (32,324) | (35,670) |
Loan procurement amortization expense | (537) | (566) | (1,742) | (1,650) |
Equity in earnings (losses) of real estate ventures | 139 | (1,860) | (199) | (4,958) |
Gain from sale of real estate | 475 | |||
Other | (288) | (337) | (812) | (1,103) |
Total other expense | (11,085) | (14,535) | (35,077) | (42,906) |
INCOME FROM CONTINUING OPERATIONS | 18,620 | 8,591 | 41,015 | 20,824 |
DISCONTINUED OPERATIONS | ||||
Income from discontinued operations | 336 | |||
Total discontinued operations | 336 | |||
NET INCOME | 18,620 | 8,591 | 41,015 | 21,160 |
NET (INCOME) LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS | ||||
Noncontrolling interest in subsidiaries | 41 | (5) | 56 | (14) |
Operating Partnership interests of third parties | (223) | (106) | (475) | (250) |
Distribution to preferred unitholders | (1,502) | (1,502) | (4,506) | (4,506) |
NET INCOME ATTRIBUTABLE TO THE COMPANY'S COMMON SHAREHOLDERS | $ 16,936 | $ 6,978 | $ 36,090 | $ 16,390 |
Diluted - as reported (in dollars per share) | $ 0.10 | $ 0.05 | $ 0.21 | $ 0.11 |
Diluted earnings per unit from discontinued operations attributable to common unitholders (in dollars per share) | $ 0.10 | $ 0.05 | $ 0.21 | $ 0.11 |
Weighted-average basic units outstanding (in units) | 169,304 | 149,758 | 167,177 | 144,919 |
Weighted-average diluted units outstanding (in units) | 170,901 | 152,006 | 168,705 | 147,082 |
AMOUNTS ATTRIBUTABLE TO COMMON UNITHOLDERS: | ||||
Income from continuing operations | $ 16,936 | $ 6,978 | $ 36,090 | $ 16,059 |
Total discontinued operations | 331 | |||
Net income | 16,936 | 6,978 | 36,090 | 16,390 |
CubeSmart, L.P. and Subsidiaries | ||||
REVENUES | ||||
Rental income | 102,385 | 85,392 | 290,744 | 242,177 |
Other property related income | 11,827 | 10,142 | 33,755 | 30,088 |
Property management fee income | 1,758 | 1,558 | 5,030 | 4,431 |
Total revenues | 115,970 | 97,092 | 329,529 | 276,696 |
OPERATING EXPENSES | ||||
Property operating expenses | 39,297 | 33,622 | 114,938 | 97,992 |
Depreciation and amortization | 38,744 | 31,622 | 114,725 | 90,224 |
General and administrative | 7,002 | 7,464 | 21,289 | 21,092 |
Acquisition related costs | 1,222 | 1,258 | 2,485 | 3,658 |
Total operating expenses | 86,265 | 73,966 | 253,437 | 212,966 |
OPERATING (EXPENSE) INCOME | 29,705 | 23,126 | 76,092 | 63,730 |
Interest: | ||||
Interest expense on loans | (10,399) | (11,772) | (32,324) | (35,670) |
Loan procurement amortization expense | (537) | (566) | (1,742) | (1,650) |
Equity in earnings (losses) of real estate ventures | 139 | (1,860) | (199) | (4,958) |
Gain from sale of real estate | 475 | |||
Other | (288) | (337) | (812) | (1,103) |
Total other expense | (11,085) | (14,535) | (35,077) | (42,906) |
INCOME FROM CONTINUING OPERATIONS | 18,620 | 8,591 | 41,015 | 20,824 |
DISCONTINUED OPERATIONS | ||||
Income from discontinued operations | 336 | |||
Total discontinued operations | 336 | |||
NET INCOME | 18,620 | 8,591 | 41,015 | 21,160 |
NET (INCOME) LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS | ||||
Noncontrolling interest in subsidiaries | 41 | (5) | 56 | (14) |
NET INCOME (LOSS) ATTRIBUTABLE TO CUBESMART L.P. | 18,661 | 8,586 | 41,071 | 21,146 |
Operating Partnership interests of third parties | (223) | (106) | (475) | (250) |
NET INCOME ATTRIBUTABLE TO OPERATING PARTNER | 18,438 | 8,480 | 40,596 | 20,896 |
Distribution to preferred unitholders | (1,502) | (1,502) | (4,506) | (4,506) |
NET INCOME ATTRIBUTABLE TO THE COMPANY'S COMMON SHAREHOLDERS | $ 16,936 | $ 6,978 | $ 36,090 | $ 16,390 |
Basic earnings (loss) per unit from continuing operations attributable to common unitholders (in dollars per share) | $ 0.10 | $ 0.05 | $ 0.22 | $ 0.11 |
Basic earnings (loss) per unit attributable to common unitholders (in dollars per share) | 0.10 | 0.05 | 0.22 | 0.11 |
Diluted - as reported (in dollars per share) | 0.10 | 0.05 | 0.21 | 0.11 |
Diluted earnings per share attributable to common shareholders (in dollars per share) | $ 0.10 | $ 0.05 | $ 0.21 | $ 0.11 |
Weighted-average basic units outstanding (in units) | 169,304 | 149,758 | 167,177 | 144,919 |
Weighted-average diluted units outstanding (in units) | 170,901 | 152,006 | 168,705 | 147,082 |
AMOUNTS ATTRIBUTABLE TO COMMON UNITHOLDERS: | ||||
Income from continuing operations | $ 16,936 | $ 6,978 | $ 36,090 | $ 16,059 |
Total discontinued operations | 331 | |||
Net income | $ 16,936 | $ 6,978 | $ 36,090 | $ 16,390 |
CONSOLIDATED STATEMENTS OF CO54
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (LP cube) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
NET INCOME | $ 18,620 | $ 8,591 | $ 41,015 | $ 21,160 |
Other comprehensive (loss) income: | ||||
Unrealized (losses) gains on interest rate swaps | (1,821) | 982 | (4,507) | (2,249) |
Reclassification of realized losses on interest rate swaps | 1,576 | 1,616 | 4,713 | 4,793 |
Unrealized loss on foreign currency translation | (215) | (483) | (284) | (55) |
OTHER COMPREHENSIVE (LOSS) INCOME | (460) | 2,115 | (78) | 2,489 |
COMPREHENSIVE INCOME | 18,160 | 10,706 | 40,937 | 23,649 |
Comprehensive income attributable to Operating Partnership interests of third parties | (217) | (138) | (473) | (285) |
Comprehensive loss (income) attributable to noncontrolling interest in subsidiaries | 49 | 4 | 67 | (12) |
COMPREHENSIVE INCOME ATTRIBUTABLE TO THE COMPANY | 17,992 | 10,572 | 40,531 | 23,352 |
CubeSmart, L.P. and Subsidiaries | ||||
NET INCOME | 18,620 | 8,591 | 41,015 | 21,160 |
Other comprehensive (loss) income: | ||||
Unrealized (losses) gains on interest rate swaps | (1,821) | 982 | (4,507) | (2,249) |
Reclassification of realized losses on interest rate swaps | 1,576 | 1,616 | 4,713 | 4,793 |
Unrealized loss on foreign currency translation | (215) | (483) | (284) | (55) |
OTHER COMPREHENSIVE (LOSS) INCOME | (460) | 2,115 | (78) | 2,489 |
COMPREHENSIVE INCOME | 18,160 | 10,706 | 40,937 | 23,649 |
Comprehensive income attributable to Operating Partnership interests of third parties | (217) | (138) | (473) | (285) |
Comprehensive loss (income) attributable to noncontrolling interest in subsidiaries | 49 | 4 | 67 | (12) |
COMPREHENSIVE INCOME ATTRIBUTABLE TO THE COMPANY | $ 17,992 | $ 10,572 | $ 40,531 | $ 23,352 |
CONSOLIDATED STATEMENTS OF CAPI
CONSOLIDATED STATEMENTS OF CAPITAL (LP cube) - USD ($) shares in Thousands, $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Increase (Decrease) in Partners' Capital | |||
Balance of Noncontrolling Interests in the Operating Partnership | $ 49,823 | ||
Contributions from noncontrolling interests in subsidiaries | 178 | $ 595 | |
Adjustment for Operating Partnership interests of third parties | (12,166) | (5,218) | $ (14,800) |
Net income (loss) | 40,540 | 20,910 | |
Other comprehensive (loss) income: | |||
Unrealized gains (losses) on interest rate swaps | 203 | 2,506 | |
Unrealized (loss) gain on foreign currency translation | (279) | (52) | |
Balance of Noncontrolling Interests in the Operating Partnership | 60,180 | 49,823 | |
Noncontrolling Interests in Operating Partnership | |||
Increase (Decrease) in Partners' Capital | |||
Balance of Noncontrolling Interests in the Operating Partnership | 49,823 | 36,275 | 36,275 |
Adjustment for Operating Partnership interests of third parties | 12,166 | 5,218 | |
Net income (loss) | 475 | 250 | |
Other comprehensive (loss) income: | |||
Unrealized gains (losses) on interest rate swaps | 3 | 38 | |
Unrealized (loss) gain on foreign currency translation | (5) | (3) | |
Balance of Noncontrolling Interests in the Operating Partnership | 60,180 | 40,590 | 49,823 |
CubeSmart, L.P. and Subsidiaries | |||
Increase (Decrease) in Partners' Capital | |||
Balance | 1,449,618 | 1,093,207 | 1,093,207 |
Balance of Noncontrolling Interests in the Operating Partnership | 49,823 | ||
Contributions from noncontrolling interests in subsidiaries | 178 | 595 | |
Issuance of common OP units | 136,662 | 235,961 | |
Issuance of restricted OP units | 1 | 4 | |
Conversion from units to shares | 1,705 | 308 | |
Exercise of OP unit options | 13,396 | 2,266 | |
Amortization of restricted OP units | 509 | (229) | |
OP unit compensation expense | 741 | 644 | |
Adjustment for Operating Partnership interests of third parties | (12,166) | (5,218) | |
Net income (loss) | 40,540 | 20,910 | |
Other comprehensive (loss) income: | |||
Unrealized gains (losses) on interest rate swaps | 203 | 2,506 | |
Unrealized (loss) gain on foreign currency translation | (279) | (52) | |
Preferred OP unit distributions | (4,506) | (4,506) | |
Common OP unit distributions | (80,817) | (57,692) | |
Balance | 1,545,785 | 1,288,704 | 1,449,618 |
Balance of Noncontrolling Interests in the Operating Partnership | 60,180 | 49,823 | |
CubeSmart, L.P. and Subsidiaries | Noncontrolling Interests in Operating Partnership | |||
Increase (Decrease) in Partners' Capital | |||
Balance of Noncontrolling Interests in the Operating Partnership | 49,823 | 36,275 | 36,275 |
Conversion from units to shares | (1,705) | (308) | |
Adjustment for Operating Partnership interests of third parties | 12,166 | 5,218 | |
Net income (loss) | 475 | 250 | |
Other comprehensive (loss) income: | |||
Unrealized gains (losses) on interest rate swaps | 3 | 38 | |
Unrealized (loss) gain on foreign currency translation | (5) | (3) | |
Common OP unit distributions | (1,077) | (880) | |
Balance of Noncontrolling Interests in the Operating Partnership | 60,180 | 40,590 | 49,823 |
CubeSmart, L.P. and Subsidiaries | Noncontrolling Interests in Operating Partnership | Capital Unit ClassB | |||
Increase (Decrease) in Partners' Capital | |||
Issuance of common OP units | 500 | ||
CubeSmart, L.P. and Subsidiaries | Total Shareholders' Equity | |||
Increase (Decrease) in Partners' Capital | |||
Balance | 1,448,026 | 1,092,276 | 1,092,276 |
Issuance of common OP units | 136,662 | 235,961 | |
Issuance of restricted OP units | 1 | 4 | |
Conversion from units to shares | 1,705 | 308 | |
Exercise of OP unit options | 13,396 | 2,266 | |
Amortization of restricted OP units | 509 | (229) | |
OP unit compensation expense | 741 | 644 | |
Adjustment for Operating Partnership interests of third parties | (12,166) | (5,218) | |
Net income (loss) | 40,596 | 20,896 | |
Other comprehensive (loss) income: | |||
Unrealized gains (losses) on interest rate swaps | 203 | 2,506 | |
Unrealized (loss) gain on foreign currency translation | (268) | (50) | |
Preferred OP unit distributions | (4,506) | (4,506) | |
Common OP unit distributions | (80,817) | (57,692) | |
Balance | 1,544,082 | 1,287,166 | 1,448,026 |
CubeSmart, L.P. and Subsidiaries | Operating Partner | |||
Increase (Decrease) in Partners' Capital | |||
Balance | $ 1,456,785 | $ 1,103,290 | $ 1,103,290 |
Balance (in units) | 163,957 | 139,328 | 139,328 |
Issuance of common OP units | $ 136,662 | $ 235,961 | |
Issuance of common OP units (in units) | 5,515 | 13,181 | |
Issuance of restricted OP units | $ 1 | $ 4 | |
Issuance of restricted OP units (in units) | 161 | 424 | |
Conversion from units to shares | $ 1,705 | $ 308 | |
Conversion from units to shares (in units) | 66 | 18 | |
Exercise of OP unit options | $ 13,396 | $ 2,266 | |
Exercise of OP unit options (in units) | 1,228 | 283 | |
Amortization of restricted OP units | $ 509 | $ (229) | |
OP unit compensation expense | 741 | 644 | |
Adjustment for Operating Partnership interests of third parties | (12,166) | (5,218) | |
Net income (loss) | 40,596 | 20,896 | |
Other comprehensive (loss) income: | |||
Preferred OP unit distributions | (4,506) | (4,506) | |
Common OP unit distributions | (80,817) | (57,692) | |
Balance | $ 1,552,906 | $ 1,295,724 | $ 1,456,785 |
Balance (in units) | 170,927 | 153,234 | 163,957 |
CubeSmart, L.P. and Subsidiaries | Preferred Operating Partner | |||
Increase (Decrease) in Partners' Capital | |||
Balance | $ 3,100 | $ 3,100 | $ 3,100 |
Other comprehensive (loss) income: | |||
Balance | 3,100 | 3,100 | 3,100 |
CubeSmart, L.P. and Subsidiaries | Accumulated Other Comprehensive (Loss) Income | |||
Increase (Decrease) in Partners' Capital | |||
Balance | (8,759) | (11,014) | (11,014) |
Other comprehensive (loss) income: | |||
Unrealized gains (losses) on interest rate swaps | 203 | 2,506 | |
Unrealized (loss) gain on foreign currency translation | (268) | (50) | |
Balance | (8,824) | (8,558) | (8,759) |
CubeSmart, L.P. and Subsidiaries | Noncontrolling Interest in Subsidiaries | |||
Increase (Decrease) in Partners' Capital | |||
Balance | 1,592 | 931 | 931 |
Contributions from noncontrolling interests in subsidiaries | 178 | 595 | |
Net income (loss) | (56) | 14 | |
Other comprehensive (loss) income: | |||
Unrealized (loss) gain on foreign currency translation | (11) | (2) | |
Balance | $ 1,703 | $ 1,538 | $ 1,592 |
CONSOLIDATED STATEMENTS OF CA56
CONSOLIDATED STATEMENTS OF CASH FLOWS (LP cube) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Operating Activities | ||
Net income | $ 41,015 | $ 21,160 |
Adjustments to reconcile net income to cash provided by operating activities: | ||
Depreciation and amortization | 116,467 | 91,874 |
Gain from sale of real estate | (475) | |
Equity compensation expense | 1,250 | 415 |
Accretion of fair market value adjustment of debt | (1,173) | (1,247) |
Equity in losses of real estate ventures | 199 | 4,958 |
Changes in other operating accounts: | ||
Other assets | (3,277) | (936) |
Restricted cash | 507 | (293) |
Accounts payable and accrued expenses | 6,086 | 2,531 |
Other liabilities | 1,417 | 945 |
Net cash provided by operating activities | 162,491 | 118,932 |
Investing Activities | ||
Acquisitions of storage facilities | (161,852) | (255,865) |
Additions and improvements to storage facilities | (18,336) | (12,870) |
Development costs | (58,399) | (17,027) |
Cash contributed to real estate venture | (2,350) | |
Cash distributed from real estate venture | 4,685 | 55,381 |
Proceeds from sale of real estate, net | 13,475 | |
Fundings of notes receivable | (4,100) | |
Change in restricted cash | 99 | 283 |
Net cash used in investing activities | (237,903) | (218,973) |
Proceeds from: | ||
Revolving credit facility | 671,800 | 578,000 |
Principal payments on: | ||
Revolving credit facility | (582,000) | (616,600) |
Mortgage loans and notes payable | (76,929) | (10,589) |
Loan procurement costs | (2,283) | (274) |
Contributions from noncontrolling interests in subsidiaries | 178 | 595 |
Distributions paid to common OP unitholders | (79,706) | (55,844) |
Distributions paid to preferred OP unitholders | (4,506) | (4,506) |
Net cash provided by financing activities | 75,529 | 128,129 |
Change in cash and cash equivalents | 117 | 28,088 |
Cash and cash equivalents at beginning of year | 2,901 | 3,176 |
Cash and cash equivalents at end of year | 3,018 | 31,264 |
Supplemental Cash Flow and Noncash Information | ||
Cash paid for interest, net of interest capitalized | 35,567 | 38,240 |
Supplemental disclosure of noncash activities: | ||
Accretion Of Liability | 11,421 | 5,357 |
Derivative valuation adjustment | 206 | 2,544 |
Foreign currency translation adjustment | (284) | (55) |
Mortgage loan assumption - acquisitions of storage facilities | 2,695 | 27,467 |
CubeSmart, L.P. and Subsidiaries | ||
Operating Activities | ||
Net income | 41,015 | 21,160 |
Adjustments to reconcile net income to cash provided by operating activities: | ||
Depreciation and amortization | 116,467 | 91,874 |
Gain from sale of real estate | (475) | |
Equity compensation expense | 1,250 | 415 |
Accretion of fair market value adjustment of debt | (1,173) | (1,247) |
Equity in losses of real estate ventures | 199 | 4,958 |
Changes in other operating accounts: | ||
Other assets | (3,277) | (936) |
Restricted cash | 507 | (293) |
Accounts payable and accrued expenses | 6,086 | 2,531 |
Other liabilities | 1,417 | 945 |
Net cash provided by operating activities | 162,491 | 118,932 |
Investing Activities | ||
Acquisitions of storage facilities | (161,852) | (255,865) |
Additions and improvements to storage facilities | (18,336) | (12,870) |
Development costs | (58,399) | (17,027) |
Cash contributed to real estate venture | (2,350) | |
Cash distributed from real estate venture | 4,685 | 55,381 |
Proceeds from sale of real estate, net | 13,475 | |
Fundings of notes receivable | (4,100) | |
Change in restricted cash | 99 | 283 |
Net cash used in investing activities | (237,903) | (218,973) |
Proceeds from: | ||
Revolving credit facility | 671,800 | 578,000 |
Principal payments on: | ||
Revolving credit facility | (582,000) | (616,600) |
Mortgage loans and notes payable | (76,929) | (10,589) |
Loan procurement costs | (2,283) | (274) |
Proceeds from issuance of common OP units | 136,663 | 235,965 |
Exercise of OP unit options | 13,396 | 2,266 |
Contributions from noncontrolling interests in subsidiaries | 178 | 595 |
Distributions paid to common OP unitholders | (80,790) | (56,728) |
Distributions paid to preferred OP unitholders | (4,506) | (4,506) |
Net cash provided by financing activities | 75,529 | 128,129 |
Change in cash and cash equivalents | 117 | 28,088 |
Cash and cash equivalents at beginning of year | 2,901 | 3,176 |
Cash and cash equivalents at end of year | 3,018 | 31,264 |
Supplemental Cash Flow and Noncash Information | ||
Cash paid for interest, net of interest capitalized | 35,567 | 38,240 |
Supplemental disclosure of noncash activities: | ||
Accretion Of Liability | 11,421 | 5,357 |
Derivative valuation adjustment | 206 | 2,544 |
Foreign currency translation adjustment | (284) | (55) |
Mortgage loan assumption - acquisitions of storage facilities | $ 2,695 | $ 27,467 |