Extra Space Storage Inc., a self-storage real estate investment trust (REIT), has completed its deal with Prudential Real Estate Investors (PREI) to acquire PREI’s 94.9 percent interest in the companies’ joint venture, ESS PRISA III LLC. The deal, worth approximately $298 million, includes 36 self-storage properties in 18 states. Extra Space had previously owned just 5.1 percent of the joint venture.
All 36 properties had been operating under the Extra Space brand prior to the sale. They contain about 2.5 million square feet of net rentable space in about 23,400 units, serving an estimated 20,000 tenants. As of March 31, the properties' collective occupancy was approximately 87.8 percent.
Six of the self-storage facilities are in New York, five are in California and three in Tennessee. States with two sites include Florida, Maryland, Massachusetts, New Jersey, Ohio, Texas and Virginia. States with single facilities include Alabama, Arizona, Connecticut, Illinois, Michigan, New Mexico, Oregon and Washington.
The $298 million acquisition cost consists of approximately $160 million of cash consideration to PREI and the assumption of an existing $145 million loan, of which $138 million relates to PREI's self-storage equity. The loan bears interest at a fixed rate of 4.97 percent per year and matures in August. Extra Space intends to pay it off using available cash flow and proceeds from new loans expected to close in the next 30 days.
Headquartered in Salt Lake City, Extra Space owns or operates 882 self-storage properties in 34 states and Washington, D.C. The company's properties comprise approximately 585,000 units and approximately 64 million square feet of rentable space, including boat storage, RV storage and business storage.