5.	INVESTMENTS IN UNCONSOLIDATED REAL ESTATE VENTURES

Investments in unconsolidated real estate ventures consist of the following:


	Equity Ownership %	Excess Profit Participation %	Investment Balance at December 31,
	Equity Ownership %	Excess Profit Participation %	2015			2014
VRS Self Storage LLC (“VRS”)	45%	54%	$	39,091		$	40,363
Storage Portfolio I LLC (“SP I”)	25%	25-40%		11,813			12,042
PRISA Self Storage LLC (“PRISA”)	2%	17%		10,309			10,520
PRISA II Self Storage LLC (“PRISA II”)	2%	17%		8,323			9,008
Extra Space West Two LLC (“ESW II”)	5%	40%		4,122			4,197
WCOT Self Storage LLC (“WCOT”)	5%	20%		3,783			3,972
Clarendon Storage Associates Limited Partnership (“Clarendon”)	50%	50%		3,131			3,148
Extra Space of Santa Monica LLC (“ESSM”)	48%	48%		1,200			1,153
Extra Space West One LLC (“ESW”)	5%	40%		(405	)		(95	)
Extra Space Northern Properties Six LLC (“ESNPS”)	10%	35%		(470	)		(87	)
Other minority owned properties	18-50%	19-50%		6,148			1,490

				87,045			85,711
Investments in Strategic Storage Growth Trust				15,962			—

Total			$	103,007		$	85,711

In these joint ventures, the Company and the joint venture partner generally receive a preferred return on their invested capital. To the extent that cash/profits in excess of these preferred returns are generated through operations or capital transactions, the Company would receive a higher percentage of the excess cash/profits than its equity interest.

In accordance with ASC 810, the Company reviews all of its joint venture relationships quarterly to ensure that there are no entities that require consolidation. As of December 31, 2015, there were no previously unconsolidated entities that were required to be consolidated as a result of this review.

On December 30, 2015, the Company entered into a new joint venture, ESS-H Bloomfield Investment LLC (“Bloomfield”). Bloomfield owns a single store in New Jersey. The Company contributed $2,885 for a 50% interest in Bloomfield. The Company’s investment in Bloomfield is included in Other minority owned properties in the table above.

In December 2013 and May 2014, the Company acquired twelve stores located in California from entities associated with Grupe Properties Co. Inc. (“Grupe.”) As part of the Grupe acquisition, the Company acquired its joint venture partners’ 60% to 65% equity interests in six stores. The Company previously held the remaining 35% to 40% interests in these stores through six separate joint ventures with Grupe. Prior to the acquisition, the Company accounted for its interests in these joint ventures as equity-method investments. The Company recognized a non-cash gain of $3,438 during the year ended December 31, 2014 as a result of re-measuring the fair value of its equity interest in one of these joint ventures held before the acquisition. During the year ended December 31, 2014, the Company recorded a gain of $584 as a result of the final cash distributions received from the other five joint ventures associated with the acquisitions that were completed during 2013. The Company recognized non-cash gains of $9,339 during the year ended December 31, 2013 as a result of re-measuring its prior equity interests in five joint ventures held before the acquisition.

On November 1, 2013, the Company acquired its joint venture partner’s 49% interest in HSRE-ESP IA, LLC (“HSRE”), an existing joint venture, for $43,475 in cash and the assumption of a $96,516 loan. The result of this acquisition is that the Company owns a 99% interest in HSRE. The joint venture partner retained a 1% interest, valued at $870, which was recorded at fair value based on the fair value of the assets in the joint venture and is included in other noncontrolling interests on the Company’s consolidated balance sheets. HSRE

owns 19 stores in various states. The stores are now consolidated as the Company owns the majority interest in the joint venture. Prior to the acquisition date, the Company accounted for its 50% interest in the joint venture as an equity-method investment. The acquisition date fair value of the previous equity interest was approximately $43,500, and is included as consideration transferred. The Company recognized a non-cash gain of $34,137 during the year ended December 31, 2013 as a result of re-measuring its prior equity interest in HSRE held before the acquisition. On June 11, 2015, the Company acquired its joint venture partners’ remaining 1% interest in HSRE for $1,267. Since the Company retained its controlling interest, this transaction was accounted for as an equity transaction. The carrying amount of the noncontrolling interest was reduced to zero to reflect this purchase, and the difference between the price paid by the Company and the carrying amount of the noncontrolling interest was recorded as an adjustment to equity attributable to the Company.

On February 13, 2013, the Company acquired its joint venture partner’s 48% equity interest in Extra Space of Eastern Avenue LLC (“Eastern Avenue”), which owned one store located in Maryland, for approximately $5,979. Prior to the acquisition, the remaining 52% interest was owned by the Company, which accounted for its investment in Eastern Avenue using the equity method. The Company recorded a non-cash gain of $2,215 related to this transaction, which represents the increase in fair value of the Company’s interest in Eastern Avenue from its formation to the acquisition date.

On February 13, 2013, the Company acquired its joint venture partner’s 61% equity interest in Extra Space of Montrose Avenue LLC (“Montrose”), which owned one store located in Illinois, for approximately $6,878. Prior to the acquisition, the remaining 39% interest was owned by the Company, which accounted for its investment in Montrose using the equity method. The Company recorded a non-cash gain of $341 related to this transaction, which represents the increase in fair value of the Company’s interest in the joint venture from its formation to the acquisition date.

Equity in earnings of unconsolidated real estate ventures consists of the following:


	For the Year Ended December 31,
	2015		2014		2013
Equity in earnings of VRS	$	4,041	$	3,510	$	3,464
Equity in earnings of SP I		1,951		1,541		1,243
Equity in earnings of PRISA		1,013		929		890
Equity in earnings of PRISA II		793		764		703
Equity in earnings of ESW II		145		102		50
Equity in earnings of WCOT		569		498		448
Equity in earnings of Clarendon		581		551		516
Equity in earnings of ESSM		493		424		369
Equity in earnings of ESW		1,875		1,571		1,406
Equity in earnings of ESNPS		633		513		461
Equity in earnings of HSRE		—		—		1,428
Equity in earnings of other minority owned properties		257		138		675

	$	12,351	$	10,541	$	11,653

Equity in earnings of ESW II, SP I and VRS includes the amortization of the Company’s excess purchase price of $26,806 of these equity investments over its original basis. The excess basis is amortized over 40 years.

Information (unaudited) related to the real estate ventures’ debt at December 31, 2015, is presented below:


	Loan Amount		Current Interest Rate			Debt Maturity
VRS—Swapped to fixed	$	52,100		3.19	%	June 2020
SP I—Fixed		88,975		4.66	%	April 2018
PRISA		—		—		Unleveraged
PRISA II		—		—		Unleveraged
ESW II—Swapped to fixed		18,505		3.57	%	February 2019
WCOT—Swapped to fixed		87,500		3.34	%	August 2019
Clarendon—Swapped to fixed		7,746		5.93	%	September 2018
ESSM—Variable		13,629		4.88	%	May 2021
ESW—Variable		17,150		1.67	%	August 2020
ESNPS—Variable		34,500		2.44	%	July 2025
Other minority owned properties		20,614		Various		Various

Combined, condensed unaudited financial information of VRS, SP I, PRISA, PRISA II, ESW II, WCOT, ESW and ESNPS as of December 31, 2015 and 2014, and for the years ended December 31, 2015, 2014 and 2013, follows:


	December 31,
	2015		2014
Balance Sheets:
Assets:
Net real estate assets	$	1,389,974	$	1,442,755
Other		33,703		34,636

	$	1,423,677	$	1,477,391

Liabilities and members’ equity:
Notes payable	$	299,730	$	301,267
Other liabilities		25,715		23,490
Members’ equity		1,098,232		1,152,634

	$	1,423,677	$	1,477,391


	For the Year Ended December 31,
	2015			2014			2013
Statements of Income:
Rents and other income	$	286,857		$	273,231		$	260,487
Expenses		(155,851	)		(153,973	)		(149,595	)
Gain on sale of real estate		60,495			—			—

Net income	$	191,501		$	119,258		$	110,892

In March 2015, PRISA II sold a single store located in New York and recorded a gain of $60,495.

The Company had no consolidated VIEs for the years ended December 31, 2015 or 2014.