National Storage Affiliates Trust (NSAT), a Maryland real estate investment trust (REIT) specializing in self-storage, has agreed to acquire SecurCare Self Storage Inc., its largest participating regional operator (PRO). Valued at $220 million, the purchase will essentially bring 216 SecurCare facilities and the operator’s management platform fully under the NSAT corporate structure. The deal is expected to close during the second quarter, officials said during the company’s fourth-quarter earnings announcement.
In conjunction with the buy, NSAT has appointed David Cramer, president and CEO of SecurCare, as its new chief operating officer and executive vice president. Cramer is expected to assume the roles around the time the merger closes. He’ll replace Steven B. Treadwell, who resigned from the positions to pursue other interests, the release stated.
NSAT also intends to offer employment to “most” SecurCare employees, including key personnel, to continue overseeing the brand’s managed portfolio. The merger means NSAT will no longer pay fees or reimbursements to SecurCare, and performance distributions related to its managed portfolio will be discontinued, officials said.
As part of the deal structure, NSAT expects to issue more than 7.6 million common shares to the owners of SecurCare. Of that total, NSAT Executive Chair Arlen Nordhagen will receive about 4.1 million shares. Nordhagen is a co-founder of SecurCare and owns approximately 53 percent of its outstanding shares, according to a filing with the Securities and Exchange Commission (SEC). Nordhagen didn’t participate in the merger negotiations, a source reported.
“With the announcement of the internalization of SecurCare, we are excited to take the next step in the evolution of [NSAT] and demonstrate that our unique structure can continue to build on the foundation of the stellar execution of our internal and external growth strategies since our IPO in 2015,” Nordhagen said.
“As we look ahead to 2020, the expected accretion from the internalization of SecurCare is the realization of one of the key benefits of [NSAT’s] PRO structure,” added Tamara Fischer, president and CEO of NSAT.
Cramer, 55, has led SecurCare since 2014. He joined the brand in 1998 and previously served as the company’s chief operating officer and director of operations. He has more than 22 years of self-storage industry experience. He and Nordhagen’s professional relationship spans more than two decades. He’s also Nordhagen’s brother-in-law, according to the SEC filing.
“While we are sorry to see Steve Treadwell leave [NSAT] to pursue an entrepreneurial opportunity, it is fortuitous that the timing of his departure coincides with the internalization of SecurCare, so that Dave Cramer can immediately step into the role of COO,” Nordhagen said. “Dave and I have worked closely together for over 20 years, and Dave's wealth of knowledge and experience in the self storage industry will provide for a seamless transition during this next phase of the company’s growth.”
Headquartered in Greenwood, Colo., 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 throughout the United States. The company has ownership interest in 742 storage facilities in 35 states and Puerto Rico. Its portfolio comprises approximately 47.1 million net rentable square feet. It's owned by its affiliate operators, who are contributing their interests in their self-storage assets over the next few years as their current mortgage debt matures.
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