Public Storage Completes $10.5 Billion National Storage Acquisition
The deal added more than 1,000 properties to the self-storage operator’s portfolio.
Public Storage (PSA), the self-storage real-estate investment trust, completed its roughly $10.5 billion acquisition of National Storage Affiliates on July 22, moving the transaction from pending in the first quarter to closed. NSA shareholders received 0.14 Public Storage shares for each NSA share.
The acquisition expanded Public Storage’s platform to more than 4,500 properties and 327 million rentable square feet. At March 31, the company operated 3,546 U.S. facilities with about 259 million rentable square feet; the NSA portfolio brought more than 550,000 units and nearly 500,000 customers.
Public Storage also quantified the deal’s expected earnings contribution. The company continues to expect the acquisition to increase funds from operations per share within the first year, with the contribution rising to about $0.35 to $0.50 a share after it realizes $110 million to $130 million of annual run-rate synergies over three to four years.
At closing, Public Storage formed a joint venture holding 313 former NSA properties across 28 states and Puerto Rico. Legacy NSA limited partners own about 80% of the venture, while Public Storage retains the balance and will receive management, asset-management, and tenant-reinsurance income.
The joint venture obtained about $2 billion of secured mortgage financing, and Public Storage provided $237 million of mezzanine financing.
Public Storage increased its financing capacity ahead of the closing, replacing a $1.5 billion revolving credit facility with a $3.0 billion revolver. It also added a $500 million delayed-draw term loan and established a $1.0 billion commercial-paper program; the new revolver’s borrowing spread was 15 basis points below the previous facility.
The company’s external-growth pipeline also extended to Canada, where it separately agreed to acquire 68 Public Storage Canada properties for $1.2 billion. The 5.3-million-square-foot portfolio was 83.1% occupied in the first quarter and is expected to produce high-single-digit near-term growth in net operating income.