Self-Storage REIT National Storage Affiliates Trust to Internalize Its 8 Participating Regional Operators

June 10, 2024

3 Min Read

National Storage Affiliates Trust (NSAT), a real estate investment trust (REIT) specializing in self-storage, announced an agreement in principle for the internalization of its participating regional operating (PRO) structure, which is scheduled to close on July 1. As part of the transaction, its eight existing PROs, who currently manage 333 of its properties, are expected to transition facility management to NSAT in staggered phases over the next 12 months, according to a press release.

“The internalization of the PRO structure marks the beginning of the next exciting chapter for [NSAT],” said David Cramer, president and CEO. “This accretive transaction will further enhance our growth profile and simplify our structure. Additionally, given the size and sophistication of [our] operating platform, now is the optimal time to consolidate all operations.”

The eight PROs are: 

  • Blue Sky Self Storage based in Colorado

  • Guardian Storage based in Irvine, California

  • Hide-Away based in Sarasota, Florida

  • Moove In Self Storage based in York, Pennsylvania

  • Personal Mini Storage based in Orlando, Florida

  • RightSpace Storage based in Dana Point, California

  • Southern Self Storage based in Palm Beach Gardens, Florida

  • Storage Solutions based in Chandler, Arizona 

In the transition, NSAT expects to offer these self-storage operators brand flexibility, enhanced customer-acquisition strategies, financial reporting, general and administrative savings and other operational benefits. It also believes the move will help with portfolio expansion, the release stated.

Many former PROs, including retired ones, will continue to maintain equity ownership in NSAT. Total cash and operating partnership units are expected to be paid in conjunction with the buyout of the management contracts and tenant insurance policies and will be valued at approximately $85 million to $90 million. Adjustment to funds from operations (FFO) per share will be included in the common shares and outstanding units. Annual FFO accretion is expected to be approximately $0.03 $0.04 per share, the release stated.

“The PRO structure has been instrumental in driving [our] tremendous growth over the years. Our long-term vision for [NSAT] always contemplated the eventual internalization of the PRO structure, and current market conditions make today the right time for a win-win scenario for common shareholders and PROs alike,” said Arlen Nordhagen, cofounder and vice chairperson of the NSAT board. “I’m grateful to our PROs for their invaluable contributions to [our] success and excited about how this event will contribute to earnings growth going forward.”

Headquartered in Greenwood, Colorado, NSAT is a self-administered and -managed REIT focused on the acquisition, operation and ownership of self-storage properties within the top 100 U.S. Metropolitan Statistical Areas. The company operates 1,050 storage facilities in 42 states and Puerto Rico. Its portfolio comprises approximately 68.7 million net rentable square feet. It’s currently owned by its affiliate operators, who have been contributing their interests in their self-storage assets as their current mortgage debt matured.

Source: National Storage Affiliates, National Storage Affiliates Trust Announces Internalization of its PRO Structure

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