8-KAcquisitions & DispositionsFinancial EventsExhibits & Filings

Extra Space Storage Inc. 8-K Report, Acquisition Completed (Sep 1, 2004)

Filed September 1, 2004For Securities:EXR

Summary

This Form 8-K filing from Extra Space Storage Inc. (EXR), dated September 1, 2004, reports on two significant financial events that occurred in late August 2004. The company completed a substantial acquisition of 26 self-storage properties for approximately $146.5 million in cash on August 27, 2004. This acquisition is a key growth initiative, expanding the company's asset base within the self-storage sector. To finance a portion of this expansion and related activities, Extra Space Storage Inc. also entered into new credit facilities. On August 27, 2004, subsidiaries secured a $111 million senior fixed-rate mortgage loan at a favorable 4.65% interest rate, due in 2009 and secured by the newly acquired properties. Additionally, on August 26, 2004, a $37 million variable-rate mortgage loan was obtained, maturing in August 2007, with interest tied to LIBOR plus a spread. These financing arrangements indicate a strategic use of debt to fund growth and manage capital structure.

Key Highlights

  • 1Acquisition of 26 self-storage properties completed on August 27, 2004, for approximately $146.5 million in cash.
  • 2The acquisition significantly expands Extra Space Storage's property portfolio.
  • 3Secured a $111 million senior fixed-rate mortgage loan with Wachovia Bank, N.A., due in 2009 at a 4.65% interest rate.
  • 4This mortgage loan is secured by the 26 newly acquired self-storage properties.
  • 5Entered into a $37 million variable-rate mortgage loan with U.S. Bank, N.A., maturing in August 2007.
  • 6The variable-rate loan carries an interest rate of LIBOR plus 175 basis points.
  • 7Information regarding these transactions is cross-referenced to the company's prospectus dated August 11, 2004.

Frequently Asked Questions

The primary purpose of this 8-K filing was to report the completion of a significant acquisition of 26 self-storage properties and to disclose new debt financing arrangements entered into by Extra Space Storage Inc. in late August 2004.

The acquisition was financed primarily through cash, with a purchase price of approximately $146.5 million. A significant portion of the funding was secured through new debt, including a $111 million fixed-rate mortgage loan and a $37 million variable-rate mortgage loan.

The company secured a $111 million senior fixed-rate mortgage loan at 4.65% interest, due in 2009, secured by the acquired properties. Additionally, a $37 million variable-rate mortgage loan was obtained, maturing in August 2007, with interest at LIBOR plus 175 basis points.

More detailed information regarding the acquisition and the mortgage loans is incorporated by reference from the company's prospectus dated August 11, 2004, which was filed as part of a Registration Statement on Form S-11/A.