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SEATTLE, WA-Shurgard Storage Centers Inc. announced today that for $38 million it has acquired the partnership interests of Fremont Storage Partners II LLC and Fremont FSP II LLC (collectively referred to by Shurgard as Fremont). Now wholly owned by Shurgard as a result of the transactions, the partnership owns 16 storage properties.

Harrell Beck, CFO and Treasurer of Seattle-based Shurgard says the acquisition was made under the terms of an option agreement set in place when the partnership was formed in 1999. Shurgard says the price paid for the partnership was calculated by the parameters set forth in the formation documents.

The transaction facilitated the storage property REIT (NYSE: SHU) in retiring approximately $63 million in secured bank financing for the partnership, which is one of several subsidiaries of Shurgard.

Shurgard is an integrated, self-managed and self-administered REIT, which is in the business of developing and acquiring self-storage centers and related operations. As of the end of last year, Shurgard was operating a network of 428 storage centers and three business parks. Prior to this transaction, the REIT owned (either directly or through subsidiaries and joint ventures) a total of 399 properties, which totaled approximately 25.3 million net rsf. Of those, 352 are located within 19 states in the United States. The remaining 47 are located throughout Europe. Shurgard is also the third-party manager for 31 additional self-storage centers and a business park with approximately 1.9 million sf.

According to its SEC filings, for the first six months of this year, Shurgard’s revenues rose 17% to $108.6 million. Net income applicable to common and before extraordinary item rose 1% to $20.5 million. A financial source says these results “reflect acquisitions, the development of new centers, and rent increases, partially offset by acquisition costs and higher debt levels.” On Aug. 21, Shurgard’s stock hit a new 52-week high of $32.19, and on Aug. 24 it made dividend payments of $0.24/ss. Though the company’s stock was rattled by the events of Sept. 11, it has been jogging upwards, closing yesterday at $29.65/ss. Shurgard will hold a third quarter earnings conference call on Thurs., Nov. 8th at 1:00 p.m. Eastern.

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