Self Storage REIT CubeSmart Prices Public Offering of Senior Unsecured Notes

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The operating partnership of CubeSmart, a self-storage real estate investment trust (REIT), has priced an underwritten public offering of $250 million of 4.375 percent senior unsecured notes due Dec. 15, 2023. CubeSmart L.P. priced the notes at 98.995 percent of the principal amount to yield 4.501 percent to maturity. The notes are fully and unconditionally guaranteed by CubeSmart, company officials said in a press release. The offering is expected to close on Dec. 17, and is subject to customary closing conditions.

The net proceeds from the offering are expected to be $245.4 million after deducting the underwriting discount and estimated transaction expenses payable by the company. The operating partnership intends to use the net proceeds to repay outstanding debt under the unsecured term loan portion of its credit facility maturing in 2014, and a portion of debt in connection with the financing of the REIT’s recent acquisition of 35 Texas self-storage facilities and one property in North Carolina.

The 36-property portfolio was purchased from Private Mini Storage Inc. for $326.2 million. CubeSmart completed the acquisition through a newly formed joint venture with an affiliate of Heitman LLC for an aggregate purchase price of $315.7 million. Each contributed capital equal to their 50 percent ownership in the venture. One facility in Houston was purchased by CubeSmart for $10.5 million.

Wells Fargo Securities LLC, Jefferies LLC, and Merrill Lynch, Pierce, Fenner & Smith Inc. acted as joint book-running managers for the public offering. Barclays Capital Inc., RBS Securities Inc., Regions Securities LLC, SunTrust Robinson Humphrey Inc., and U.S. Bancorp Investments Inc. acted as co-managers for the offering.

Based in Wayne, Pa., CubeSmart owns or manages 518 self-storage facilities across the United States and operates the CubeSmart Network, which consists of more than 700 additional self-storage facilities.

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