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SEATTLE-Shurgard Storage Centers has completed a trio of transactions valued at more than $400 million. The self-storage REIT issued three million common shares (currently valued at $33.50 apiece) for 19 storage centers in Minnesota, paid $164 million for 36 centers developed under a tax retention operating lease facility and paid another $153 million to gain a majority stake in Shurgard Europe. The news pushed Shurgard’s closing share price up $0.42 on Tuesday to $33.50 a share, a new 52-week high.

The acquisition of the 19 storage centers closed on June 30. The storage centers were owned by five separate entities and operated as Minnesota Mini-Storage. The consideration of 3,050,000 shares of common stock could include another 50,000 common shares if the stores meet certain revenue targets prior to year-end 2005, according to the company.

Over the last two months, Shurgard purchased all or part of 36 storage centers previously developed under the company’s tax retention operating leases. The company no longer has any outstanding tax retention operating leases. The total purchase price, approximately $164.7 million, was financed with borrowings under the company’s revolving credit facility along with $22.2 million in proceeds from the company’s notes offering in March 2003. Twenty five of the stores have been open anywhere from one month to two years; the rest are under development. The stores still under development will cost an additional $35.6 million to complete, according to the company. The company owns 110% of 22 stores and will own between 51% and 85% of the remaining stores involved in the transaction.

In the third completed transaction, Shurgard on June 20 acquired an additional 42.5% indirect ownership interest in Shurgard Europe by increasing its equity interest in Recom & Co. SNC from 9.1% to 88.1%. In so doing, the company increased its stake in Shurgard Europe from approximately 18% to approximately 61%, including the 10.6% interest the company acquired from Credit Suisse First Boston in April 2003.

The transaction with Recom included a $153-million loan. Recom used the proceeds to repay the outstanding balance of, and certain costs relating to, Recom’s principal credit facility that matured on June 21, 2003. Recom is a Belgium partnership that holds debt and equity investments in Shurgard Europe. An officer of Shurgard now manages Recom. Shurgard’s European operating partners and a group of current and former employees of Shurgard Europe own the remaining 17.9% of Recom. Shurgard says it intends to liquidate Recom in 2003, subject to the approval of the other owners of Recom.

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