Extra Space Storage Buys 17 VA Self-Storage Facilities for $200M, Sells 4.5M Shares of Common Stock

Update 11/22/13 Extra Space Storage Inc., a self-storage real estate investment trust (REIT), has agreed to purchase a 17-property portfolio from Virginia-based operator Mini Price Storage for approximately $200 million in cash. The portfolio comprises about 1.5 million square feet of net rentable space in 14,000 units. As of Sept. 30, the facilities were about 90 percent occupied, company officials said.

In this case, we actually bought an operating company, said Clint Halverson, vice president, corporate communication and investor relations for Extra Space. It was an asset purchase, but we basically bought the name and the company itself.

The transaction is subject to the completion of due diligence and other closing conditions. Extra Space expects to complete the acquisition around January 2014.

The company also plans to sell 4.5 million shares of common stock in a public offering, with Citigroup acting as the sole book-running manager, according to the source. The REIT will grant the underwriter a 30-day option to purchase up to an additional 675,000 shares. Extra Space intends to use the net proceeds from the offering to partially fund the Virginia portfolio transaction as well as other previously announced acquisitions, including five properties under contract with a total purchase price of $50.4 million. The funds will also be used to repay a portion of the outstanding indebtedness under the company's secured lines of credit and other general corporate and working-capital purposes.

The move is similar to last year when Extra Space purchased 28 self-storage properties in multiple states for $190.2 million and sold 5.2 million shares of common stock in a public offering to help fund the deal.

Headquartered in Salt Lake City, Extra Space owns or operates 1,007 self-storage properties in 35 states; Washington, D.C.; and Puerto Rico. The companys properties comprise approximately 667,000 units and 74 million square feet of rentable space.