Public Storage 1999 Annual Report Download - page 24

22
OTE 4. Real Estate Facilities
Activity in real estate facilities during 1999, 1998 and 1997 is as follows:
(Amounts in thousands) 1999 1998 1997
Operating facilities, at cost:
Beginning balance $2,962,291 $3,077,529 $2,185,498
Property acquisitions:
Business combinations (Note 3) 727,925 224,999 657,347
Other acquisitions 36,013 64,818 184,504
Disposition of facilities (26,021) — —
Facilities contributed to unconsolidated real estate entities (15,415) — —
Newly developed facilities opened for operations 62,870 38,629 8,639
Acquisition of minority interest (Note 8) 45,747 23,293 8,904
Capital improvements 29,023 31,714 35,117
PSB deconsolidation (see below) — (498,691) (2,480)
Ending balance 3,822,433 2,962,291 3,077,529
Accumulated depreciation:
Beginning balance (411,176) (378,248) (297,655)
Additions during the year (123,495) (98,173) (82,047)
Disposition of facilities 1,259 — —
PSB deconsolidation (see below) — 65,245 1,454
Ending balance (533,412) (411,176) (378,248)
Construction in progress:
Beginning balance 83,138 42,635 35,815
Current development 109,047 79,132 45,865
Property acquisitions — merger with Storage Trust 11,449 — —
Property contribution to unconsolidated real estate entities — — (30,406)
Newly developed facilities opened for operations (62,870) (38,629) (8,639)
Ending balance 140,764 83,138 42,635
Total real estate facilities $3,429,785 $2,634,253 $2,741,916
Operating facilities
During 1999, we acquired a total of 253 real estate facilities for an aggregate cost of $727,925,000 in connection with certain business
combinations (Note 3). In addition, we also acquired three storage facilities and two industrial facilities for an aggregate cost of $36,013,000,
consisting of the cancellation of mortgage notes receivable ($5,573,000), other assets ($3,800,000), and cash ($26,640,000).
In April 1999, we sold six properties for approximately $10,500,000 (composed of $1,460,000 cash, notes receivable of $5,240,000, and
other assets of $3,800,000) and granted the buyer an option to acquire an additional eight properties for approximately $18,800,000.The
option to acquire the properties was exercised in January 2000. There was no gain or loss on the disposition of these facilities.
In addition, during 1999, we disposed of an industrial facility, two storage facilities through condemnation proceedings, and four plots
of land for an aggregate of approximately $16,416,000, composed of $11,196,000 cash and $5,220,000 mortgage notes receivable. In
aggregate, we recorded a gain upon sale of $2,154,000, representing the difference between the proceeds received and the net book value
of the real estate.
During 1998, we acquired a total of 53 real estate facilities for an aggregate cost of $224,999,000 in connection with certain business
combinations (Note 3).We also acquired two storage facilities for an aggregate cost of $9,384,000, consisting of the cancellation of mortgage
notes receivable ($2,495,000), the Company’s existing investment ($527,000), and cash ($6,362,000). In addition, three commercial facilities
were acquired for an aggregate cost of $55,434,000 consisting of the assumption of mortgage notes payable ($14,526,000), the issuance of
minority interests ($1,206,000) and cash ($39,702,000).
Effective April 1, 1998, we no longer included the accounts of PSB in our consolidated financial statements (Note 2). As a result of this
change, real estate facilities and accumulated depreciation were reduced by $498,691,000 and $65,245,000, respectively, reflecting our historical
cost of the PSB real estate facilities which are no longer included in the consolidated financial statements.
U B L I C T O R A G E ,N C . 1999 N N U A L RE P O R T