SALT LAKE CITY, UT, Jun 23, 2009 (MARKETWIRE via COMTEX) -- Extra Space Storage Inc. ("Extra Space" or the "Company") (NYSE:
EXR) announced today it has entered into a definitive agreement to
contribute 42 of its wholly-owned properties into a newly formed
joint venture (the "JV") with an affiliate of Harrison Street Real
Estate Capital, LLC ("HSRE").
HSRE will contribute approximately $62.4 million in cash to the JV in
return for an 80.0% ownership interest in the JV. The JV will assume
approximately $213.0 million of debt which is secured by the
properties. The Company will receive approximately $62.4 million in
cash and a 20.0% interest in the JV for its contribution of the
properties. The properties are located in Arizona, California,
Florida, Illinois, Kentucky, Maryland, Michigan, Missouri, Nevada,
Ohio, Pennsylvania, Rhode Island, Tennessee, Texas and Virginia.
The Company will continue the day-to-day operations of the
properties. The joint venture transaction is subject to the
satisfaction of customary due diligence and closing conditions and is
currently anticipated to close late in the third quarter or early in
the fourth quarter of 2009.
Spencer F. Kirk, chairman and chief executive officer of the Company,
stated: "We are pleased to announce our partnership with Harrison
Street. This transaction will allow Extra Space to recycle capital and
de-lever our balance sheet without losing our nationwide scale of
operations. Harrison Street is a reputable, knowledgeable real
estate partner with whom we look forward to a long-term, mutually
beneficial relationship."
The Company also announced that it repurchased approximately $43.0
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.
Forward-Looking Statements
Certain information set forth in this release contains
"forward-looking statements" within the meaning of the federal
securities laws. Forward-looking statements include statements
concerning our plans, objectives, goals, strategies, future events,
future revenues or performance, capital expenditures, financing
needs, plans or intentions relating to acquisitions and other
information that is not historical information. In some cases,
forward-looking statements can be identified by terminology such as
"believes," "estimates," "expects," "plans," "may," "will," "should,"
"anticipates," or "intends" or the negative of such terms or other
comparable terminology, or by discussions of strategy. We may also
make additional forward-looking statements from time to time. All
such subsequent forward-looking statements, whether written or oral,
by us or on our behalf, are also expressly qualified by these
cautionary statements.
All forward-looking statements are based upon our current
expectations and various assumptions. Our expectations, beliefs and
projections are expressed in good faith and we believe there is a
reasonable basis for them, but there can be no assurance that
management's expectations, beliefs and projections will result or be
achieved. All forward-looking statements apply only as of the date
made. We undertake no obligation to publicly update or revise
forward-looking statements which may be made to reflect events or
circumstances after the date made or to reflect the occurrence of
unanticipated events.
There are a number of risks and uncertainties that could cause our
actual results to differ materially from the forward-looking
statements contained in or contemplated by this release. Any
forward-looking statements should be considered in light of the risks
referenced in the "Risk Factors" section included in our most recent
Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Such
factors include, but are not limited to:
-- the possibility that the joint venture transaction may not close on
the terms described in this release, or at all, or that the expected
benefits from the transaction may not be realized;
-- changes in general economic conditions and in the markets in which we
operate;
-- the effect of competition from new self-storage facilities or other
storage alternatives, which could cause rents and occupancy rates to
decline;
-- potential liability for uninsured losses and environmental
contamination;
-- difficulties in our ability to evaluate, finance and integrate
acquired and developed properties into our existing operations and to lease
up those properties, which could adversely affect our profitability;
-- the impact of the regulatory environment as well as national, state,
and local laws and regulations including, without limitation, those
governing REITs, which could increase our expenses and reduce our cash
available for distribution;
-- recent disruptions in credit and financial markets and resulting
difficulties in raising capital at reasonable rates, which could impede our
ability to grow;
-- economic uncertainty due to the impact of war or terrorism, which
could adversely affect our business plan;
-- the successful realignment of our executive management team; and
-- our ability to attract and retain qualified personnel and management
members.
About Extra Space Storage Inc.
Extra Space Storage Inc., headquartered in Salt Lake City, Utah, is a
fully integrated, self-administered and self-managed real estate
investment trust that owns and/or operates 694 self-storage
properties in 33 states and Washington, D.C. The Company's properties
comprise approximately 475,000 units and over 50 million square feet
of rentable space. The Company is the second largest owner and/or
operator of self-storage properties in the United States.
About Harrison Street Real Estate Capital, LLC
Harrison Street's model is to invest in areas of the real estate
market in which tenant demand is driven from education, healthcare or
storage related activities. These sectors principally include
self-storage, student housing, senior housing/assisted living, and
medical office/healthcare. Harrison Street, on behalf of Harrison
Street Real Estate Partners I, LP and Harrison Street Real Estate
Partners II, LP, has acquired or is in the process of developing over
140 properties worth greater than $1.6 billion. As of May 31, 2009,
Harrison Street has acquired or has under development throughout 26
states in the U.S. over 3,700 senior housing units, 42,000 storage
units, 8,200 student housing beds, 2,100 dry and wet boat storage and
728,000 square feet of medical office space.
For Information:
James Overturf
Extra Space Storage Inc.
(801) 365-4501
Mark Collinson
CCG Investor Relations
(310) 477-9800
SOURCE: Extra Space Storage Inc.
