GREENWOOD VILLAGE, CO—National Storage Affiliates Trust has forged a joint venture with a major state pension fund advised by Heitman Capital Management to acquire the iStorage portfolio for about $630 million. Separately, the Greenwood Village, CO-based self-storage REIT has agreed to acquire iStorage's property management platform and the iStorage brand.

A subsidiary of NSA has agreed to contribute approximately $80 million in cash funded from its revolving line of credit in exchange for a 25% ownership interest in the unconsolidated JV, while the pension fund, the identity of which was not disclosed, has agreed to contribute approximately $240 million in cash in exchange for a 75% ownership interest in the JV. Both parties have also agreed to commit up to an additional $100 million in equity to fund jointly approved acquisitions in the future.

“This is an attractive, new capital source for NSA which further enhances our external growth opportunities,” says Arlen Nordhagen, CEO of NSA. He says the JV's planned acquisition of the iStorage portfolio and his company's deal for the iStorage management platform “further demonstrate our commitment to grow the company through multiple avenues and to drive shareholder value.”

The iStorage portfolio consists of 66 properties containing approximately 4.5 million rentable square feet, configured in over 36,000 storage units and located across 12 states. For NSA, the acquisition represents significant growth in its top target markets, including Florida and California, according to an investor presentation.

The JV expects to complete the acquisition of the iStorage portfolio during the fourth quarter of this year, while NSA's management platform acquisition by NSA is expected to be completed concurrently. Both transactions are conditioned upon each other and are subject to the satisfaction of closing conditions. When the portfolio acquisition closes, NSA will hold ownership in and operate 415 self-storage properties located in 23 states with over 25 million rentable square feet.

Instant Insights /

National Storage Affiliates Picks Up iStorage Portfolio, Platform

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