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Self-Storage REIT National Storage Affiliates Trust Completes Acquisition of iStorage Portfolio, Management Platform

Update 10/10/16 – The NSAT joint venture has completed its acquisition of the iStorage portfolio. Separately, the REIT also closed on its purchase of the iStorage property-management platform. As part of the latter acquisition, NSAT appointed Steven Treadwell as president of the iStorage management division, which will be known as National Storage Affiliates Trust Management Co., according to a press release.

In his new role, Treadwell will lead a team of approximately 150 associates charged with growing the portfolio and integrating iStorage operations with NSAT established practices. Treadwell has served as senior vice president of operations for NSAT since 2014 and was instrumental in the company’s initial public offering, the release stated. He previously worked in the energy and real estate sectors, including serving as divisional chief financial officer at Prologis Inc., a global REIT in the industrial sector. He is a 12-year veteran of the Air Force and received a bachelor’s degree from the U.S. Air Force Academy. He holds master’s degrees from the Harvard Business School and Massachusetts Institute of Technology.

"We are very pleased to announce the completion of this JV acquisition, and we warmly welcome the iStorage team to NSAT,” Nordhagen said. “The iStorage acquisition is an ideal fit with NSAT’s business structure, and the strategic decision to acquire the iStorage management platform strengthens our industry footprint as we continue to expand our market presence. The appointment of Steve Treadwell as president of the iStorage management division is a clear-cut fit for NSAT. Steve has been immensely successful in managing our self-storage operations platform, providing leadership to the best-practices committee, directing the implementation of our revenue-management and analytics system, and expanding our Internet marketing outreach.”

9/14/16 – National Storage Affiliates Trust (NSAT), a Maryland real estate investment trust (REIT) specializing in self-storage, has formed a joint venture (JV) with a state pension fund advised by Heitman Capital Management LLC to acquire the iStorage portfolio for $630 million. The portfolio consists of 66 properties comprising approximately 4.5 million rentable square feet of storage space in more than 36,000 units across 12 states. Separately, NSAT has agreed to acquire the iStorage property-management platform, including a property-management company, a captive insurance company and the iStorage brand.

Both acquisitions are expected to be complete by the end of the year, according to an NSAT press release. The transactions are conditioned upon each other and subject to the satisfaction of a number of other closing conditions. A corporate presentation that provides supplemental information about the portfolio and management-platform acquisition will be available in the investor-relations section of the NSAT website.

A subsidiary of NSAT has agreed to contribute approximately $80 million in cash funded from its revolving line of credit in exchange for a 25 percent ownership interest in the unconsolidated JV. The JV investor has agreed to contribute approximately $240 million in cash in exchange for a 75 percent ownership interest, the release stated. The parties have also agreed to commit up to an additional $100 million in equity to fund jointly approved acquisitions in the future. The JV anticipates incurring new debt to fund the remaining balance of the purchase price and transaction costs.

“We’re very pleased to announce this joint-venture partnership. This is an attractive, new capital source for NSAT, which further enhances our external growth opportunities,” said CEO Arlen Nordhagen. “We’re excited about the planned acquisition by this joint venture of the iStorage portfolio and NSAT's acquisition of the iStorage management platform, and we welcome the iStorage managers and staff to the NSAT family. These transactions further demonstrate our commitment to grow the company through multiple avenues and drive shareholder value.”

“The culmination of iStorage reflects years of hard work and sacrifice from many people, and I’m very excited to see the portfolio and management platform continue under the NSAT umbrella,” said Chris Miller, founder and chairman of iStorage. “I couldn't be more proud of our iStorage team on the ground, and look forward to watching them grow with the new opportunities this integration presents."

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. Upon closing of the above transactions, the company will own 25 million rentable square feet of storage space in 415 facilities in 23 states. NSAT is 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.

Based in Winter Garden, Fla., and founded in 2008, iStorage is a privately owned self-storage investment and management company.



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