Extra Space to buy 13 AAAAA facilities
$150 million deal includes 11 sites in Bay area
Extra Space will pay about $130 million in newly designated Series A partnership units and assume $20 million in debt for the California and Hawaii facilities, according to a filing with the U.S. Securities and Exchange Commission.
The properties being acquired from affiliates of AAAAA Rent-A-Space consist of 11 facilities in northern California's Bay area, where the closely held company is based, and two in Hawaii. They have a combined 14,700 self-storage units and about 1.04 million square feet of rental space, Extra Space said.
Extra Space operates 640 storage centers in 32 states, including 225 that it owns.
The company will have spent $300 million on acquisitions this year once the transaction closes at the end of the second quarter. That's close to the high end of its goal of $200 million to $350 million of purchases this year, according to spokesman James Overturf.
"We have a captive pipeline of acquisitions," he said in a telephone interview, referring to Extra Space's role as a manager of other groups' self-storage facilities.
The transaction is tax-deferred for AAAAA Rent-A-Space, because the preferred units won't be redeemable until Sept. 1, 2008, Extra Space Chief Legal Officer Charles Allen said. AAAAA will be issued $100 million of loans, backed by the units, when the deal closes in order to get it cash sooner, he said.
Shares of Extra Space Storage rose 8 cents to close at $16.92 a share Monday on the New York Stock Exchange.
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