Extra Space Storage Ups Ownership With $190M Buy
SALT LAKE CITY-Extra Space Storage Inc. has entered into a letter of intent with a joint venture partner to acquire the partner's interest in one of the company's existing joint ventures that owns 21 self-storage properties in 11 states. The 21 assets are currently operated by the company under the Extra Space Storage brand.
The joint venture properties contain approximately 1.7 million square feet of net rentable space in approximately 13,600 units. As of September 30, 2012, approximately 89% of the net rentable space at these properties was occupied, according to a prepared statement. Upon closing, the company would own 100% of the joint venture properties.
In addition, Extra Space Storage has entered into definitive purchase agreements to acquire seven additional properties located in Florida, Maryland, Massachusetts and New Jersey, with an aggregate of approximately 575,000 square feet of net rentable space in approximately 5,800 units.
As of September 30, 2012, approximately 86.6% of the net rentable space at these properties was occupied. In total, with the acquisition of the joint venture partner's interest, the company now has 28 properties under contract or letter of intent, with an aggregate purchase price of approximately $190.2 million.
The company intends to close each of these acquisitions by the end of the year.
In addition, the company issued a statement saying that it would issue and sell 5.2 million shares of its common stock in a public offering. Citigroup is acting as the sole book-running manager for the offering. The company will grant the underwriter a 30-day option to purchase up to an additional 780,000 shares.
Extra Space Storage intends to use the net proceeds of the offering to fund its acquisition of the properties mentioned above, to repay a portion of the outstanding indebtedness under its secured lines of credit and for other general corporate and working capital purposes.
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