Summary
Extra Space Storage Inc. (EXR) announced a significant strategic move through a Current Report (8-K) filed on April 16, 2012, detailing the entry into a material definitive agreement. The Company, through a subsidiary, has agreed to acquire Prudential Real Estate Investors’ (PREI) 94.9% stake in ESS PRISA III LLC, a joint venture that owns and operates 36 self-storage properties across 18 states. This acquisition represents a substantial expansion, bringing an additional 2.5 million square feet of rentable space and consolidating full ownership of these 36 assets under EXR. The transaction is valued at approximately $298.0 million, comprising $160.0 million in cash and the assumption of a $145.0 million loan ($138.0 million attributable to PREI's interest). The existing loan carries a fixed interest rate of 4.97% and matures in August 2012, with EXR actively in discussions to refinance it. The deal is expected to close in July 2012, subject to customary closing conditions, and will significantly increase EXR's owned portfolio.
Key Highlights
- 1Extra Space Storage Inc. (EXR) is acquiring PREI's 94.9% interest in the ESS PRISA III LLC joint venture.
- 2The joint venture owns and operates 36 self-storage properties across 18 states, totaling approximately 2.5 million square feet of net rentable space.
- 3The total acquisition cost is approximately $298.0 million, including $160.0 million in cash and the assumption of a $145.0 million loan.
- 4The acquired properties were approximately 87.8% occupied as of March 31, 2012.
- 5The existing loan has a fixed interest rate of 4.97% and matures in August 2012; EXR is seeking to refinance it.
- 6The transaction is expected to be consummated in July 2012, subject to customary closing conditions.