Public Storage Completes $10.5 Billion National Storage Affiliates Deal
The all-stock acquisition expanded Public Storage’s global platform to more than 4,500 properties.
Public Storage (PSA) completed its acquisition of National Storage Affiliates Trust (NSA) in an all-stock transaction valued at about $10.5 billion, advancing the self-storage operator’s plan to accelerate investment and expand its scale in key U.S. markets. The combination gave Public Storage a global platform of more than 4,500 properties and 327 million rentable square feet.
Each outstanding NSA common share was converted into 0.14 of a newly issued Public Storage common share, with cash paid in lieu of fractional shares. Public Storage issued about 11.2 million common shares to former NSA shareholders and holders of its equity awards at closing. NSA’s two classes of 6% preferred shares were exchanged one-for-one for newly issued Public Storage preferred shares carrying materially unchanged rights and preferences.
The acquisition strengthened Public Storage's position as a global self-storage operator, adding to its U.S. portfolio and its long-standing European presence through Shurgard. The company has also announced a strategic entry into Canada through Public Storage Canada. Management framed the transaction as the first major investment under its PS4.0 strategy, which is intended to support growth in earnings and cash flow per share.
“The NSA acquisition represents the first major PS4.0 Value Creation Engine milestone, demonstrating the Company’s focus on disciplined and accelerated investment activity that grows earnings and cash flow per share for our shareholders,” Chief Executive Tom Boyle said.
NSA brought a portfolio concentrated in major U.S. metropolitan areas. At the end of March, the real-estate investment trust held interests in and operated 1,061 self-storage properties spanning about 69.3 million rentable square feet across 37 states and Puerto Rico. Public Storage's digital platform, data-science capabilities and operating model can improve the financial performance of the acquired properties.
The closing also established a joint venture holding 313 properties contributed by NSA’s operating partnership, with the assets valued at about $3.2 billion. Former NSA operating-partnership investors held 80% of the venture’s common equity through an aggregator, while a Public Storage subsidiary held the remaining 20%. The venture incurred about $2.2 billion of debt, including roughly $2 billion of secured mortgage financing from Goldman Sachs Bank USA and Wells Fargo Bank and approximately $237 million of mezzanine financing from a Public Storage subsidiary.
Public Storage will wholly own 488 of NSA’s more than 1,000 properties on its balance sheet, concentrating the acquired portfolio in Sun Belt and other core markets. The joint-venture structure gave participating NSA operating-partnership holders a tax-efficient way to retain exposure to 313 properties while Public Storage took control of the broader platform. With the transaction completed, the company’s next task is to apply its PS Next operating model across the acquired assets and turn the added scale into the earnings and cash-flow growth underpinning PS4.0.