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INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURE (Tables)

6 Months Ended

Jun. 30, 2020

INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURES

Schedule of investments in real estate ventures


		CubeSmart		Number of Stores as of:						Carrying Value of Investment as of:
		Ownership		June 30,			December 31,			June 30,			December 31,
Unconsolidated Real Estate Ventures		Interest		2020			2019			2020			2019
191 IV CUBE Southeast LLC ("HVPSE") ⁽¹⁾		10%		14			—			$	5,384		$	—
191 IV CUBE LLC ("HVP IV") ⁽²⁾		20%		21			21				22,375			23,112
CUBE HHF Northeast Venture LLC ("HHFNE") ⁽³⁾		10%		13			13				1,824			1,998
CUBE HHF Limited Partnership ("HHF") ⁽⁴⁾		50%		35			35				64,114			66,007
				83			69			$	93,697		$	91,117

(1)

On March 19, 2020, the Company invested a 10% ownership interest in a newly-formed real estate venture that acquired 14 self-storage properties located in Florida (2), Georgia (8) and South Carolina (4). HVPSE paid $135.3 million for these stores, of which $7.7 million was allocated to the value of the in-place lease intangible. The acquisition was funded primarily through the venture’s $81.6 million secured term loan. The remainder of the purchase price was contributed pro-rata by the Company and its unaffiliated joint venture partner. The Company’s total contribution to HVPSE related to this portfolio acquisition was $5.6 million. The secured loan bears interest at LIBOR plus 1.60% and matures on March 19, 2023 with options to extend the maturity date through March 19, 2025, subject to satisfaction of certain conditions and payment of the extension fees as stipulated in the loan agreement.

(2)

The stores owned by HVP IV are located in Arizona (2), Connecticut (2), Florida (4), Georgia (2), Maryland (1), Minnesota (1), Pennsylvania (1) and Texas (8). The Company’s total contribution to HVP IV in connection with these store acquisitions was $26.3 million. As of June 30, 2020, HVP IV had $82.2 million outstanding on its $107.0 million secured loan facility, which bears interest at LIBOR plus 1.70% per annum, and matures on May 16, 2021 with options to extend the maturity date through May 16, 2023, subject to satisfaction of certain conditions and payment of the extension fees as stipulated in the loan agreement. As of June 30, 2020, HVP IV also had $55.5 million outstanding under a separate secured loan that bears interest at LIBOR plus 2.75% per annum, and matures on June 9, 2022 with options to extend the maturity date through June 9, 2024, subject to satisfaction of certain conditions and payment of the extension fees as stipulated in the loan agreement.

(3)

The stores owned by HHFNE are located in Connecticut (3), Massachusetts (6), Rhode Island (2) and Vermont (2). The Company’s total contribution to HHFNE in connection with these store acquisitions was $3.8 million. As of June 30, 2020, HHFNE had an outstanding $45.0 million secured loan facility, which bears interest at LIBOR plus 1.20% per annum and matures on December 16, 2024.

(4)

The stores owned by HHF are located in North Carolina (1) and Texas (34). As of June 30, 2020, HHF had an outstanding $100.0 million secured loan, which bears interest at 3.59% per annum and matures on April 30, 2021.

Summary of the financial position of the ventures


		June 30,			December 31,
		2020			2019 ⁽¹⁾

Assets		(in thousands)
Storage properties, net		$	672,554		$	552,791
Other assets			22,520			11,997
Total assets		$	695,074		$	564,788

Liabilities and equity
Other liabilities		$	14,670		$	10,064
Debt			361,421			280,392
Equity
CubeSmart			93,697			91,117
Joint venture partners			225,286			183,215
Total liabilities and equity		$	695,074		$	564,788

(1)

Excludes HVPSE as it acquired its initial assets on March 19, 2020.

Summary of results of operations of the ventures


		Three Months Ended June 30,						Six Months Ended June 30,
		2020			2019 ⁽¹⁾			2020			2019 ⁽¹⁾

		(in thousands)
Total revenues		$	16,797		$	21,075		$	31,402		$	44,278
Operating expenses			(7,978)			(9,082)			(14,920)			(19,244)
Other expenses			(121)			(2,936)			(234)			(3,079)
Interest expense, net			(2,985)			(5,089)			(5,705)			(9,305)
Depreciation and amortization			(9,100)			(8,415)			(15,523)			(17,921)
Gains from sale of real estate, net			—			106,667			—			106,667
Net (loss) income		$	(3,387)		$	102,220		$	(4,980)		$	101,396
Company’s share of net (loss) income		$	(174)		$	10,527		$	(179)		$	10,788

(1)

Excludes HVPSE as it acquired its initial assets on March 19, 2020 and includes HVP III’s results of operations through June 6, 2019 (date of consolidation).