8-KAcquisitions & DispositionsFinancial EventsSecurities & Listing+1

Extra Space Storage Inc. 8-K Report, Acquisition Completed (Jul 20, 2005)

Filed July 20, 2005For Securities:EXR

Summary

Extra Space Storage Inc. (EXR) filed this Form 8-K on July 20, 2005, to report the closing of its acquisition of the Storage USA self-storage business on July 14, 2005. This transformative transaction involved the acquisition of 61 wholly-owned properties, equity interests in 54 joint venture properties, and the assumption of management for 84 franchise and managed properties. A significant portion of the acquired assets (259 properties) were contributed to five new joint ventures with Prudential, where EXR holds minority initial equity stakes but significant preferred return and promoted interests. Financially, the acquisition was supported by a combination of debt and equity. The company secured a $100 million bridge loan and three new mortgage loans totaling $213 million to finance the deal. Additionally, EXR issued approximately $22.7 million worth of limited partnership units (ESS OP Units) to accredited investors, which are exchangeable for common stock. While this 8-K details the completion of the acquisition and related financing, detailed financial statements and pro forma information will be filed in an amendment.

Key Highlights

  • 1Completion of the acquisition of the Storage USA self-storage business on July 14, 2005.
  • 2Acquired 61 wholly-owned self-storage properties.
  • 3Gained equity interests in 54 joint venture properties and assumed management of 84 franchise/managed properties.
  • 4Established five new joint ventures with Prudential, contributing 259 properties, with EXR holding minority initial equity but significant promoted interests.
  • 5Secured $100 million bridge loan and $213 million in new mortgage loans to finance the transaction.
  • 6Issued approximately $22.7 million in ESS OP Units, exchangeable for EXR common stock, to accredited investors.
  • 7Detailed financial statements and pro forma information will be provided in a future amendment.

Frequently Asked Questions

This 8-K filing announces the completion of Extra Space Storage Inc.'s acquisition of the Storage USA self-storage business, which occurred on July 14, 2005. It details the assets acquired and the financing arrangements put in place.

The acquisition was financed through a combination of debt and equity. This included a $100 million bridge loan, three new mortgage loans totaling $213 million, and the issuance of approximately $22.7 million in limited partnership units (ESS OP Units).

Extra Space Storage contributed 259 acquired properties into five new joint ventures with Prudential. While EXR holds a minority initial equity stake (2-5%) in these ventures, it has preferred return rights and a significant promoted interest (17-20%), indicating potential for future profit participation as performance increases.

The filing states that the required financial statements of the acquired business and pro forma financial information will be filed by amendment not later than 71 calendar days after the date of this 8-K filing.