4. Non-Controlling Interest

Non-Controlling Interest in Consolidated Entities

Units of limited partnership interests in the Operating Partnership (“OP units”) that are owned by other limited partners are included in non-controlling interest on our consolidated balance sheets. As of December 31, 2014, the Operating Partnership had 27,673,213 OP units outstanding; of which we owned 98.8% and other limited partners owned 1.2%. The outstanding OP units held by outside limited partners are redeemable for cash, or at our option, for a like number of shares of our common stock.

In January 2014, we agreed to not exercise our right under the Operating Partnership agreement to deliver shares of our common stock in lieu of cash upon a request for redemption of OP units held by our limited partners and instead agreed to redeem such OP units for cash until such time that we had an effective registration statement covering the resale of shares of our common stock issuable upon exchange of OP units held by such limited partners. As a result of this agreement, we classified the non-controlling interest covered by this agreement as outside of equity. In August 2014, the required registration statement became effective and thus, we now have the ability to exercise our right to deliver shares in the event of an OP unit redemption request. Therefore, we are reporting our non-controlling interest within equity as of December 31, 2014.

For the year ended December 31, 2014, we redeemed 131,093 OP units held by our non-controlling interest holders for cash of $1.8 million. Our non-controlling interest holders continued to hold 331,282 OP units as of December 31, 2014. No OP units were redeemed in 2013.

The following is an analysis of the controlling and non-controlling interest from December 31, 2013 to December 31, 2014:

The following is an analysis of the controlling and non-controlling interest from April 23, 2013, the date of our IPO, to December 31, 2013:

Allocation of Profit and Loss and Cash Distributions prior to our IPO

Prior to the IPO, All profits, losses and cash distributions of the Predecessor were allocated based on the percentages as follows:

Upon the completion of the IPO, the Preferred Units and Common Units in the Predecessor were exchanged for shares of our common stock or OP units in the Operating Partnership, or for certain unit holders in the Predecessor, were redeemed for cash.