SUBSEQUENT EVENTS |
12 Months Ended |
|---|---|
Dec. 31, 2021 | |
| Subsequent Events [Abstract] | |
| SUBSEQUENT EVENTS | SUBSEQUENT EVENTS Northwest Retirement
As discussed in Note 1, one of the Company's largest PROs, Northwest, retired effective January 1, 2022. As a result of the retirement event, management of our properties in the Northwest managed portfolio was transferred to the Company and the Northwest brand name and related intellectual property was internalized by the Company, and the Company discontinued payment of any supervisory and administrative fees or reimbursements to Northwest. As part of the internalization, most of Northwest's employees were offered and provided employment by the Company and continue managing Northwest's portfolio of properties as members of the Company's existing property management platform.
Under the terms of the Company's facilities portfolio management agreement with Northwest, in connection with a retirement event leading to the transfer of management of our properties to us and related intellectual property, Northwest was entitled to receive OP units based on a contractual formula. Using this formula, the Company determined that Northwest was entitled to receive an equivalent of 46,540 OP units totaling $3.2 million. The Company allocated the purchase price to tangible fixed assets and intangible assets acquired, consisting of a management contract and the Northwest trade name. The tangible and intangible assets related to the internalization will be included in other assets, net in the Company's condensed consolidated balance sheets.
Additionally, in connection with the retirement of Northwest, effective as of January 1, 2022, 2,078,357 subordinated performance units related to Northwest's managed portfolio were converted into 3,911,260 OP units, with each subordinated performance unit being converted into the number of OP units determined by dividing the average cash available for distribution, or CAD, per unit on the series NW subordinated performance units over the two-year period prior to conversion by 110% of the CAD per unit on the OP units determined over the same period. CAD per unit on the series NW subordinated performance units and OP units was determined by the Company based upon the application of the provisions of the operating partnership agreement applicable to the distributions of operating cash flow and capital transactions proceeds.
2033 Senior Unsecured Notes
On January 28, 2022 the operating partnership issued the November 2033 Notes. The Company used the proceeds to repay outstanding amounts on its revolving line of credit and for general corporate purposes.
Subordinated Performance Unit To OP Unit Conversions
Subordinated performance units are convertible into OP units after a two year lock-out period and then generally (i) at the holder’s election only upon the achievement of certain performance thresholds relating to the properties to which such subordinated performance units relate (a "voluntary conversion") or (ii) at the Company's election upon a retirement event of a PRO that holds such subordinated performance units or upon certain qualifying terminations. Following such lock-out period, a holder of subordinated performance units in the Company's operating partnership may elect a voluntary conversion one time each year prior to December 1st to convert a pre-determined portion of such subordinated performance units into OP units in the Company's operating partnership, with such conversion effective January 1st of the following year with each subordinated performance unit being converted into the number of OP units determined by dividing the average cash available for distribution, or CAD, per unit on the series of specific subordinated performance units over the one-year period prior to conversion by 110% of the CAD per unit on the OP units determined over the same period. CAD per unit on the series of specific subordinated performance units and OP units is determined by the Company based generally upon the application of the provisions of the operating partnership agreement applicable to the distributions of operating cash flow and capital transactions proceeds.During the year ended December 31, 2021, the Company received notices requesting the conversion of 82,611 subordinated performance units. Effective January 1, 2022, the Company issued 235,241 OP units in satisfaction of such voluntary conversion requests
|