RELATED PARTY TRANSACTIONS |
9 Months Ended |
|---|---|
Sep. 30, 2017 | |
| 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 the Company's 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 three months ended September 30, 2017 and 2016, the Company incurred $3.7 million and $3.0 million, respectively, for supervisory and administrative fees to the PROs and during the nine months ended September 30, 2017 and 2016, the Company incurred $10.5 million and $7.8 million, respectively, for supervisory and administrative fees to the PROs. Such fees are included in general and administrative expenses in the accompanying condensed consolidated statements of operations.
Payroll Services
The employees responsible for operation of the self storage properties are generally employees of the PROs who charge the Company for the costs associated with the respective employees. For the three months ended September 30, 2017 and 2016, the Company incurred $6.1 million and $5.1 million, respectively, for payroll and related costs reimbursable to these PROs, and for the nine months ended September 30, 2017 and 2016, the Company incurred $17.8 million and $13.8 million, respectively, for payroll and related costs reimbursable to these PROs. Such costs are included in property operating expenses in the accompanying condensed consolidated statements of operations.
Due Diligence Costs
During the three months ended September 30, 2017 and 2016, the Company incurred $0.2 million and $0.4 million, respectively, of expenses payable to certain PROs related to self storage property acquisitions sourced by the PROs, and during the nine months ended September 30, 2017 and 2016, the Company incurred $0.5 million and $0.7 million, respectively, of expenses payable to certain PROs related to self storage property acquisitions sourced by the PROs. These expenses, which are based on the volume of transactions sourced by the PROs, are intended to reimburse the PROs for due diligence costs incurred in the sourcing and underwriting process. For the three and nine months ended September 30, 2017, these due diligence costs are capitalized as part of the basis of the acquired self storage properties and for the three and nine months ended September 30, 2016, these due diligence costs are included in acquisition costs in the accompanying condensed consolidated statements of operations.
Management Fees and Other Revenue
The unconsolidated real estate venture pays certain customary fees to the Company for managing and operating the unconsolidated real estate venture properties, including property management fees, call center fees, platform fees, acquisition fees and development management fees. During the three and nine months ended September 30, 2017, the Company earned $2.0 million and $6.0 million, respectively, of management fees and other revenue for managing and operating the unconsolidated real estate venture. The fees are reported in management fees and other revenue in the accompanying condensed consolidated statements of operations.
Self Storage Property Acquisitions
During the nine months ended September 30, 2017, the Company issued 44,917 subordinated performance units as partial consideration for the acquisition of a self storage property to SA-SCMI LLC, an affiliate of Securcare and Move It. At the time of the issuance, SA-SCMI LLC was an affiliate of Arlen D. Nordhagen, the Company's chairman and chief executive officer.
During the nine months ended September 30, 2017, the Company issued 75,147 OP units and 23,666 subordinated performance units as partial consideration for the acquisition of self storage properties to Howard Family Limited Partnership I, an affiliate of Northwest and an affiliate of Kevin Howard, a member of the Company's board of trustees.
During the nine months ended September 30, 2017, the Company issued 10,766 OP units as partial consideration for the acquisition of a self storage property to Van Mourick Diversified, LP, an affiliate of Optivest and an affiliate of Mark Van Mourick, a member of the Company's board of trustees.
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