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An Acquisitive Mind: InStorage REIT's Phenomenal Growth

Elaine Foxwell Comments

InStorage REIT is the first and only Canadian REIT focused exclusively on the ownership and management of self-storage facilities. Based in Toronto, the REIT has a current portfolio of 52 self-storage properties in Alberta, Ontario, Quebec and Saskatchewan. The company owns and operates properties in small towns and large cities with a customer base of more than 25,000 individuals and businesses.

During 2007, the REIT made several purchases to increase its holdings in the storage industry. “Growth has exceeded our expectations,” says T. James Tadeson, chief executive officer.

In addition to its wholly owned properties, the company manages four other properties for third parties and five for its development partner, InScotia Developments.

Growth Through Purchase

During 2007, InStorage purchased several portfolios that brought the REIT’s holdings up to almost 3 million square feet of leaseable space. “It was a very busy year for us in terms of acquisitions and development,” Tadeson says. The company’s 2007 activities included:

February 2007: Purchased four facilities comprising the Store Edge Self Storage portfolio in Alberta and Saskatchewan for $28.5 million. These properties total 223,000 square feet. Three other properties were acquired for $11.1 million for the REIT’s development partner, InScotia Developments.

March 2007: The REIT entered into an agreement with the developer/owner of the Windsor, Ontario, facility in which InStorage will receive fees for the management of the facility until it is fully stabilized and acquired. The property is fully climate-controlled, and contains 48,000 square feet of gross leaseable area (GLA) with expansion capability to add a further 17,000 square feet. InStorage expects it will acquire the facility upon full stabilization, which is anticipated in 2010.

During this month, the company also opened a new facility in Calgary, Alberta, aggregating 80,000 square feet of GLA. This property was developed by InScotia. The REIT provided mezzanine loan financing for the construction of the property, and will receive management fees until the facility is fully stabilized and acquired, expected in 2010.

April 2007: Bought 11 facilities from Storage Now, Storage MAXX and Storage One, collectively known as the Storage Now portfolio, for $110 million. The facilities in Alberta, Ontario and Saskatchewan total 660,000 square feet. Purchased a 24,000-square-foot facility in Milton, Ontario, for $3 million.

May 2007: Paid $114 million for the Apple Self-Storage portfolio that consists of 10 properties in Ontario and Quebec.

June 2007: Purchased Entreposage Domestik, a 226,000-square-foot portfolio in Quebec for $22 million.

August 2007: Acquired a 53,000-square-foot property in Airdrie, Alberta, just north of Calgary, for $8 million, which includes expansion potential for an additional 60,000 square feet. Bought a facility in Milton, Ontario, for $4 million. The 27,000 facility has room for an additional 48,000 feet and expansion is under construction.

October 2007: The REIT bought out its co-owner’s 50 percent share in a property in Vaughan, Ontario, for $5 million. The 56,000-square-foot facility is being expanded by an additional 20,000 feet.

In addition, two new two facilities opened this year, adding approximately 128,000 square feet of GLA to the REIT’s managed portfolio.

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