8-KMaterial AgreementsExhibits & Filings

Extra Space Storage Inc. 8-K Report, Material Agreement (Jul 16, 2015)

Filed July 16, 2015For Securities:EXR

Summary

This Form 8-K filing by Extra Space Storage Inc. (EXR) on July 16, 2015, primarily concerns an amendment to their previously announced merger agreement with SmartStop Self Storage, Inc. The key development is the inclusion of the Ladera Ranch, California self-storage facility (the "Existing Ladera Facility") back into the merger transaction, which was initially slated to be an excluded asset. This was facilitated by the termination of a separate asset purchase agreement for the facility and the execution of Amendment No. 1 to the Merger Agreement. Furthermore, Extra Space Storage has entered into a separate Purchase and Sale Agreement to acquire a "to-be-developed" self-storage facility adjacent to the Existing Ladera Facility, referred to as the "New Ladera Facility," for $8.5 million. This new facility is expected to be substantially completed in the latter half of 2016. While the amendment does not alter the overall merger consideration for SmartStop stockholders, it signifies a strategic adjustment in the acquired assets and introduces a new development acquisition for Extra Space.

Key Highlights

  • 1Extra Space Storage Inc. amended its merger agreement with SmartStop Self Storage, Inc. to include the Ladera Ranch, California facility (Existing Ladera Facility) back into the transaction.
  • 2The amendment addresses the exclusion of certain assets, ensuring the Ladera Ranch facility is now part of the overall acquisition.
  • 3A separate Purchase and Sale Agreement was executed to acquire a "to-be-developed" self-storage facility (New Ladera Facility) adjacent to the Existing Ladera Facility for $8.5 million.
  • 4The New Ladera Facility is expected to be completed and available for occupancy in the second half of 2016.
  • 5The amendment to the merger agreement does not change the total merger consideration payable to SmartStop stockholders.
  • 6Strategic 1031, an entity controlled by SmartStop's CEO, is involved in the development of the New Ladera Facility and has been granted an option to repurchase the Existing Ladera Facility under specific default conditions.
  • 7The filing indicates a strategic decision to integrate the Ladera Ranch properties into the Extra Space portfolio.

Frequently Asked Questions

The main purpose of this 8-K filing is to announce an amendment to Extra Space Storage's merger agreement with SmartStop Self Storage, Inc. This amendment primarily concerns the inclusion of a previously excluded self-storage facility in Ladera Ranch, California, back into the merger and the acquisition of a new, to-be-developed facility in the same location.

According to the filing, the termination of a separate asset purchase agreement and the execution of Amendment No. 1 to the Merger Agreement do not impact the aggregate merger consideration payable to SmartStop stockholders. Extra Space is effectively acquiring the Ladera Ranch facility on terms consistent with the original agreement.

Extra Space has agreed to purchase a new, to-be-developed self-storage facility adjacent to the Existing Ladera Facility for $8.5 million. This acquisition represents a new development project for Extra Space, expected to be completed in the second half of 2016. It highlights Extra Space's strategy of expanding its footprint through both acquisitions and development.

Yes, the New Ladera Facility is part of a mixed-use building development, and Extra Space has granted Strategic 1031 an option to purchase the Existing Ladera Facility if Extra Space defaults on its obligations to close the Purchase Agreement under certain circumstances. The acquisition is also subject to customary closing conditions, including due diligence and substantial completion of the building.