Extra Space Storage Inc. has entered an agreement to contribute 42 of its wholly owned properties to a newly formed joint venture with an affiliate of Harrison Street Real Estate Capital LLC. The properties are in Arizona, California, Florida, Illinois, Kentucky, Maryland, Michigan, Missouri, Nevada, Ohio, Pennsylvania, Rhode Island, Tennessee, Texas and Virginia, and Extra Space will continue to handle daily operation.
 
HSRE will contribute approximately $62.4 million in cash to the JV in return for an 80 percent ownership interest. The JV will assume approximately $213 million of debt, secured by the properties. Extra Space will receive approximately $62.4 million in cash and a 20 percent ownership interest.
 
The transaction is subject to the satisfaction of customary due diligence and closing conditions and is expected to close late in the third quarter or early in the fourth quarter.
 
Extra Space has also repurchased approximately $43 million principal amount of exchangeable senior notes due in 2027 for approximately $36.3 million. The repurchase will result in a one-time gain of approximately $5.1 million or approximately $0.06 per share on early extinguishment of debt for the quarter ending June 30, 2009. This gain was not previously included in the company's earnings guidance for 2009.

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