Annual report pursuant to Section 13 and 15(d)


12 Months Ended
Dec. 31, 2015
Noncontrolling Interest [Abstract]  
All of the limited partner equity interests in our operating partnership not held by the Company are reflected as noncontrolling interests. Noncontrolling interests also include ownership interests in DownREIT partnerships held by entities other than our operating partnership. NSA is the general partner of our operating partnership and is authorized to cause our operating partnership to issue additional partner interests, including OP units and subordinated performance units, at such prices and on such other terms as it determines in its sole discretion.
As of December 31, 2015 and 2014, units reflecting noncontrolling interests consisted of the following:
December 31,
OP units


Subordinated performance units


LTIP units


DownREIT units
DownREIT OP units


DownREIT subordinated performance units




While the Company controls our operating partnership and manages the daily operations of our operating partnership's business, the Company did not have an ownership interest or share in our operating partnership's profits and losses prior to the completion of the Company's initial public offering. The increase in OP Units, DownREIT OP units, subordinated performance units, and DownREIT subordinated performance units outstanding from December 31, 2014 to December 31, 2015 was related to the acquisition of self storage properties and a centralized call center. The increase in LTIP units outstanding from December 31, 2014 to December 31, 2015 was due to the issuance of compensatory LTIP units to third party consultants, employees and a PRO.
The Company is entitled to cause our operating partnership to make distributions to OP unit holders and subordinated performance unit holders in our operating partnership from time to time in its sole discretion. To the extent distributions are made, the holders of OP units are entitled to receive distributions with respect to all of the Company's self storage property portfolio and the holders of each series of subordinated performance units are entitled to receive distributions with respect to the portfolio of self storage properties to which the series of subordinated performance units relates. To the extent that there is available operating cash flow or capital transaction proceeds, subject to maintaining the Company's qualification as a REIT, the Company may cause our operating partnership to make distributions.
Conversion of LTIP Units
LTIP units are a special class of partnership interest in our operating partnership that allow the holder to participate in the ordinary and liquidating distributions received by holders of the OP units (subject to the achievement of specified levels of profitability by our operating partnership or the achievement of certain events). LTIP units were first granted under the 2013 Long-Term Incentive Plan (the "2013 Plan"). Some of the granted LTIP units vested immediately or upon completion of the Company's initial public offering. Others vest upon the contribution of self storage properties or along a schedule at certain times prior to December 31, 2017. LTIP units do not have full parity with OP units with respect to liquidating distributions and do not receive ordinary distributions until such parity is reached pursuant to the terms of the LP Agreement. If such parity is reached under the LP Agreement, upon vesting, vested LTIP units may be converted into an equal number of OP units, and thereafter have all the rights of OP units, including redemption rights.
Subordinated Performance Unit Conversion Rights
Other than in connection with a retirement event, after a minimum of two years from the later of completion of the Company's initial public offering or the issuance of subordinated performance units in connection with the initial contribution of a PRO's self storage properties to the Company, holders of subordinated performance units can voluntarily convert such units for OP units (inclusive of a specified conversion penalty) upon the achievement of certain performance thresholds with respect to a specific self storage portfolio.
OP Unit Redemption Rights
The holders of OP units are not entitled to elect redemption until one year after the later of the closing of the Company's initial public offering or the issuance of the OP units. Following such one year period, the Company will have the ability to satisfy the redemption request by issuing common shares on a one-for-one basis or the payment of cash, solely at the option of the Company. Accordingly, the limited partner interests are included in noncontrolling interests within equity in the accompanying balance sheets as of December 31, 2015 and 2014.