|12 Months Ended
Dec. 31, 2022
|Subsequent Events [Abstract]
Move It Retirement
As discussed in Note 1, one of the Company's PROs, Move It, retired effective January 1, 2023. As a result of the retirement event, management of our properties in the Move It managed portfolio was transferred to the Company and the Move It 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 Move It. As part of the internalization, a majority of Move It's employees were offered and provided employment by the Company and will continue managing Move It'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 Move It, in connection with a retirement event leading to the transfer of management of our properties to us and related intellectual property, Move It was entitled to receive cash totaling $4.5 million. The Company allocated the purchase price to intangible assets acquired, consisting of a management contract and the Move It trade name. The 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 Move It, effective as of January 1, 2023, 926,623 subordinated performance units related to Move It's managed portfolio were converted into 2,545,063 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 MI 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 MI 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.
On January 1, 2023, the Company, as acquiror, and Move It entered into a Contribution and Purchase Agreement (the "Contribution Agreement") whereby the Company acquired an ownership interest (approximately 0.5%) in SBOA TI Reinsurance Ltd. (the "Reinsurance Company"), a Cayman Islands exempted company. The Reinsurance Company provides reinsurance for a self storage tenant insurance program issued by a licensed insurance company, whereby tenants of the Company's self storage facilities and tenants of other operators participating in the program can purchase insurance to cover damage or destruction to their personal property while stored at such facilities. The Company is entitled to receive its share of distributions of any profits generated by the Reinsurance Company, depending on actual losses incurred by the program. As part of the transaction, the Company also acquired the rights to the access fees associated with the tenant insurance-related arrangements from Move It.
The consideration paid for the interest in the Reinsurance Company and the rights to access fees associated with the tenant insurance-related arrangements was $12.2 million of cash. The Contribution Agreement contains customary representations, warranties, covenants and agreements of the Company and the sellers.
Credit Facility Recast
On January 3, 2023, the Company's operating partnership, as borrower, certain of its subsidiaries, as subsidiary guarantors, and the Company entered into a third amended and restated credit agreement with a syndicated group of lenders which expands the total borrowing capacity of its credit facility by $405.0 million to $1.955 billion with an expansion feature to expand the total borrowing capacity to $2.5 billion. The maturity date of the revolving line of credit is now January 2027, while the total borrowing capacity was increased to $950 million from $650 million. In connection with the credit facility recast, the $125 million Term Loan A due January 2023 was eliminated by the Company, Term Loan B increased from $250 million to $275 million, Term Loan C increased from $225 million to $325 million, Term Loan D increased from $175 million to $275 million, Term Loan E increased from $125 million to $130 million, and the Company eliminated the $175 million term loan facility due in June 2023. In connection with the credit facility recast, effective January 3, 2023, all of our LIBOR-based interest rate swaps were converted into SOFR-based interest rate swaps. Additionally, on November 14, 2022, we entered into a swap agreement that became effective February 1, 2023 to fix $125.0 million of variable rate debt outstanding under Term Loan E at 4.86% through the maturity date.
Personal Mini Portfolio
On February 24, 2023, the Company entered into an agreement with affiliates of Personal Mini, one of the Company's PROs, to acquire a portfolio of 15 properties located in Florida for approximately $145.0 million, subject to receipt of approval from the selling entity's shareholders and other customary closing conditions. The Company expects to complete the acquisition in the first quarter of 2023.
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, 2022, the Company received notices requesting the conversion of (i) 397,000 subordinated performance units and (ii) 203,637 DownREIT subordinated performance units. Effective January 1, 2023, the Company issued (i) 481,811 OP units and (ii) 195,573 DownREIT OP Units, respectively, in satisfaction of such voluntary conversion requests