RELATED PARTY TRANSACTIONS |
12 Months Ended |
|---|---|
Dec. 31, 2016 | |
| Related Party Transactions [Abstract] | |
| RELATED PARTY TRANSACTIONS |
RELATED PARTY TRANSACTIONS
Supervisory and Administrative Fees
The Company has entered into asset management agreements with the PROs to provide leasing, operating, supervisory and administrative services related to its self storage properties. The asset management agreements generally provide for fees ranging from 5% to 6% of gross revenue for the managed self storage properties. During the years ended December 31, 2016, 2015 and 2014, the Company incurred $11.0 million, $7.6 million and $4.5 million, respectively, for supervisory and administrative fees to the PROs. Such fees are included in general and administrative expenses in the accompanying statements of operations.
Affiliate Payroll Services
The employees responsible for operation of the self storage properties are employees of the PROs who charge the Company for the costs associated with the respective employees. For the years ended December 31, 2016, 2015 and 2014, the Company incurred $19.4 million, $13.4 million and $8.4 million, respectively, for payroll and related costs reimbursable to these affiliates. Such costs are included in property operating expenses in the accompanying statements of operations.
Due Diligence Costs
During the years ended December 31, 2016 and 2015, the Company reimbursed certain PROs for $1.1 million and $0.6 million of due diligence costs related to certain self storage property acquisitions sourced by the PROs. These expenses are included in acquisition costs in the accompanying statements of operations.
During the year ended December 31, 2014, in connection with the acquisition of certain self storage properties sourced by an affiliate of NSA Predecessor, the Company agreed to reimburse the related party for $0.2 million of due diligence costs related to the acquisitions.
Notes Receivable
In connection with the acquisition of 16 self storage properties from PROs during the year ended December 31, 2014, the Company assumed certain mortgages that provided for interest at above-market rates. The sellers of the self storage properties agreed to reimburse the Company for the difference between the fair value and the contractual value of the assumed mortgages which amounted to $5.2 million. Due to the structure of the transaction, the amount owed to the Company was considered a receivable for the issuance of equity and was recorded as an offset against equity. During the years ended December 31, 2016 and 2015, the Company received above-market interest reimbursements from the sellers totaling $1.4 million and $1.6 million, respectively.
In addition, in exchange for $1.4 million and $1.4 million of principal payment reimbursements received related to these assumed mortgages during the years ended December 31, 2016 and 2015, the Company issued 67,832 and 85,130 OP units to the sellers during the year ended December 31, 2016 and 2015.
Notes Payable
During the year ended December 31, 2015, in connection with the acquisition of self storage properties owned in DownREIT partnerships, the Company entered into bridge loan agreements for $5.3 million payable to principals of the PRO that contributed the properties. The notes bore interest at a weighted average fixed rate of 3.30% and were fully repaid during the year ended December 31, 2015.
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