Quarterly report pursuant to Section 13 or 15(d)

NONCONTROLLING INTERESTS

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NONCONTROLLING INTERESTS
3 Months Ended
Mar. 31, 2019
Equity [Abstract]  
SHAREHOLDERS' AND NONCONTROLLING INTERESTS
NONCONTROLLING INTERESTS
Noncontrolling Interests
All of the OP equity in the Company's operating partnership not held by the Company are reflected as noncontrolling interests. Noncontrolling interests also include ownership interests in DownREIT partnerships held by entities other than the Company's operating partnership. NSA is the general partner of its operating partnership and is authorized to cause its operating partnership to issue additional partner interests, including OP units and subordinated performance units, at such prices and on such other terms as it determines in its sole discretion.
As of March 31, 2019 and December 31, 2018, units reflecting noncontrolling interests consisted of the following:
 
March 31, 2019
 
December 31, 2018
Series A-1 preferred units
501,918

 
343,719

OP units
30,229,228

 
28,874,103

Subordinated performance units
10,739,868

 
10,749,475

LTIP units
762,720

 
931,671

DownREIT units
 
 
 
DownREIT OP units
1,848,261

 
1,834,786

DownREIT subordinated performance units
4,371,622

 
4,386,999

Total
48,453,617

 
47,120,753


Series A-1 Preferred Units
The 6.000% Series A-1 Cumulative Redeemable Preferred Units ("Series A-1 preferred units") rank senior to OP units and subordinated performance units in the Company's operating partnership with respect to distributions and liquidation. The Series A-1 preferred units have a stated value of $25.00 per unit and receive distributions at an annual rate of 6.000%. These distributions are cumulative. The Series A-1 preferred units are redeemable at the option of the holder after the first anniversary of the date of issuance, which redemption obligations may be satisfied at the Company’s option in cash in an amount equal to the market value of an equivalent number of the Company's 6.000% Series A cumulative redeemable preferred shares of beneficial interest ("Series A preferred shares") or the issuance of Series A preferred shares on a one-for-one basis, subject to adjustments. The increase in Series A-1 preferred units outstanding from December 31, 2018 to March 31, 2019 was due to the issuance of Series A-1 preferred units in connection with the acquisition of self storage properties.
OP Units and DownREIT OP units
OP units in the Company's operating partnership are redeemable for cash or, at the Company's option, exchangeable for the Company's common shares of beneficial interest, $0.01 par value per share ("common shares") on a one-for-one basis, and DownREIT OP units are redeemable for cash or, at the Company's option, exchangeable for OP units in its operating partnership on a one-for-one basis, subject to certain adjustments in each case. The OP holders of OP units are generally not entitled to elect redemption until one year after the issuance of the OP units. The holders of DownREIT OP units are generally not entitled to elect redemption until five years after the date of the contributor's initial contribution.
The increase in OP Units outstanding from December 31, 2018 to March 31, 2019 was due to the issuance of 863,148 OP units related to the voluntary conversions of 913,680 subordinated performance units (as discussed further below), the issuance of 184,040 OP units in connection with the acquisition of self storage properties and 337,847 LTIP units which were converted into OP units, partially offset by the redemption of 29,910 OP units for common shares.
The increase in DownREIT OP units outstanding from December 31, 2018 to March 31, 2019 was due to the issuance of 13,475 DownREIT OP units related to the conversion of 15,377 DownREIT subordinated performance units (as discussed further below).
Subordinated Performance Units and DownREIT Subordinated Performance Units
Subordinated performance units may also, under certain circumstances, be convertible into OP units which are exchangeable for common shares as described above, and DownREIT subordinated performance units may, under certain circumstances, be exchangeable for subordinated performance units on a one-for-one basis. Subordinated performance units are only 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 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. The holders of DownREIT subordinated performance units are generally not entitled to elect redemption until at least five years after the date of the contributor's initial contribution.
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 LP Agreement applicable to the distributions of operating cash flow and capital transactions proceeds.
The decrease in subordinated performance units outstanding from December 31, 2018 to March 31, 2019 was due to the voluntary conversion of 913,680 subordinated performance units into 863,148 OP units partially offset by the issuance of 904,073 subordinated performance units for co-investment by certain of the Company's PROs in connection with the acquisition of self storage properties.
The decrease in DownREIT subordinated performance units outstanding from December 31, 2018 to March 31, 2019 was due to the conversion of 15,377 DownREIT subordinated performance units into 13,475 DownREIT OP units.
LTIP Units
LTIP units are a special class of partnership interest in the Company's operating partnership that allow the holder to participate in the ordinary and liquidating distributions received by holders of the OP units (subject to the achievement of specified levels of profitability by the Company's operating partnership or the achievement of certain events). LTIP units may also, under certain circumstances, be convertible into OP units on a one-for-one basis, which are then exchangeable for common shares as described above.
The decrease in LTIP units outstanding from December 31, 2018 to March 31, 2019 was due to the conversion of 337,847 LTIP units into OP units partially offset by the issuance of 168,896 compensatory LTIP units to employees and consultants.