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Extra Space Storage to buy SmartStop Self Storage in $1.4 billion deal

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Staff writer |
SmartStop Self Storage
Acquisition   Real estate investment trust to be sold

Extra Space Storage has entered into a definitive agreement to acquire SmartStop Self Storage, a public, non-traded real estate investment trust (REIT).

SmartStop stockholders will receive $13.75 per share in cash which represents a total purchase price of $1.4 billion. Extra Space will pay $1.29 billion, and the remaining $120 million will come from the sale of certain assets by SmartStop at or prior to the closing.

SmartStop, based in Ladera Ranch, California, is currently the seventh largest owner and operator of self-storage facilities in the United States, operating 169 self-storage properties in 21 states, and in Toronto, Canada.

Upon completion of the acquisition, Extra Space will own 121 SmartStop stores and will assume the property management of 43 third-party managed stores, all located in the United States.

Certain assets of SmartStop will be sold for approximately $120 million, as adjusted for certain construction costs, at or prior to the closing of the transaction, including one store in California, beneficial interests in two stores in Alabama and five stores in Toronto, Canada. The stores in Alabama and California will be managed by Extra Space following the transaction.

The acquisition is expected to be accretive to funds from operations as adjusted (AFFO). Once completed, the acquisition will increase Extra Space's presence across the United States.

The acquisition is subject to the approval of SmartStop's stockholders and other customary closing conditions. Extra Space management expects the acquisition to close in the latter half of 2015.


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