COMMITMENTS AND CONTINGENCIES
|12 Months Ended|
Dec. 31, 2015
|Commitments and Contingencies Disclosure [Abstract]|
|COMMITMENTS AND CONTINGENCIES||
COMMITMENTS AND CONTINGENCIES
In January 2015 the Company acquired three self storage properties that are subject to non-cancelable leasehold interest agreements that are classified as operating leases. These lease agreements expire between 2034 and 2051, inclusive of extension options that we anticipate exercising. The lease agreements provide for fixed rental increases throughout the term of the lease, and, accordingly, the Company recognizes lease expense on a straight-line basis over the expected lease terms. Rent expense under these ground lease agreements is included in property operating expenses in the accompanying statements of operations and amounted to $0.9 million for the year ended December 31, 2015.
In September 2014 the Company acquired a self storage property that is subject to a non-cancelable ground lease agreement that is classified as an operating lease. This agreement provides for a minimum lease term that expires in June 2045 and provides for extension options that if exercised would extend the lease expiration until June 2075. The estimated useful life of the related self storage property extends through 2054; therefore, the Company intends to exercise extension options whereby the lease term would expire in 2055. The ground lease agreement provides for fixed increases throughout the term of the lease and, accordingly, the Company recognizes lease expense on a straight-line basis over the expected lease term. Rent expense under this ground lease agreement is included in property operating expenses in the accompanying statements of operations and amounted to $0.1 million and less than $0.1 million for the years ended December 31, 2015 and 2014, respectively.
In March 2014, the Company entered into a non-cancelable operating lease that expires in July 2020 for its corporate headquarters in Greenwood Village, Colorado. Under the terms of the office lease, the Company obtained an option to extend the lease for an additional term of five years at then current market rates. The office lease provides for an abated rent period and the value of this inducement is being accounted for as a reduction to rent expense over the term of the lease. Rent expense related to this office lease is included in general and administrative expenses in the accompanying statements of operations and amounted to $0.1 million for the years ended December 31, 2015 and 2014.
As of December 31, 2015, future minimum cash payments under the Company's operating leases are as follows (in thousands):
The Company is subject to litigation, claims, and assessments that may arise in the ordinary course of its business activities. Such matters include contractual matters, employment related issues, and regulatory proceedings. Although occasional adverse decisions or settlements may occur, the Company believes that the final disposition of such matters will not have a material adverse effect on the Company's financial position, results of operations, or liquidity.
The entire disclosure for commitments and contingencies.
Reference 1: http://www.xbrl.org/2003/role/presentationRef