RELATED PARTY TRANSACTIONS |
9 Months Ended |
|---|---|
Sep. 30, 2018 | |
| Related Party Transactions [Abstract] | |
| RELATED PARTY TRANSACTIONS |
RELATED PARTY TRANSACTIONS
Supervisory and Administrative Fees
For the self storage properties that are managed by the PROs, the Company has entered into asset management agreements with the PROs to provide leasing, operating, supervisory and administrative services. 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, 2018 and 2017, the Company incurred $4.4 million and $3.7 million, respectively, for supervisory and administrative fees to the PROs and during the nine months ended September 30, 2018 and 2017, the Company incurred $12.6 million and $10.5 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
For the self storage properties that are managed by the PROs, the employees responsible for operations are employees of the PROs who charge the Company for the costs associated with the respective employees. For the three months ended September 30, 2018 and 2017, the Company incurred $7.4 million and $6.1 million, respectively, for payroll and related costs reimbursable to these PROs and for the nine months ended September 30, 2018 and 2017, the Company incurred $21.9 million and $17.8 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, 2018 and 2017, the Company incurred less than $0.1 million and $0.2 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, 2018 and 2017, the Company incurred $0.3 million and $0.5 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. These due diligence costs are capitalized as part of the basis of the acquired self storage properties.
Self Storage Property Acquisitions
During the nine months ended September 30, 2018, the operating partnership issued 11,490 subordinated performance units to an affiliate of Personal Mini (the Company's chairman and chief executive officer, Arlen D. Nordhagen, has a noncontrolling minority ownership interest in this affiliate of Personal Mini), for $0.3 million of co-investment related to the acquisition of a self storage property from an unrelated third party.
During the nine months ended September 30, 2018, the operating partnership issued 19,973 subordinated performance units to affiliates of Hide-Away, one of the Company's PROs, as partial consideration for the acquisition of a self storage property.
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