National Storage Affiliates Trust (the "Company") (NYSE: NSA) today announced that it has commenced an underwritten public offering of 5,900,000 common shares of beneficial interest of the company. The company expects to grant the underwriter a 30-day option to purchase up to an additional 885,000 common shares.
The company intends to initially use a portion of the proceeds from the offering to repay all of the borrowings outstanding under its revolving line of credit (the "Revolver"). The company expects to use the additional proceeds from the offering, together with amounts it expects to redraw from the Revolver, to make approximately $160.8 million in capital contributions to, in exchange for a 25% ownership interest in, a joint venture (the "JV") with an affiliate of Heitman Capital Management LLC ("JV Investor") that has been recently formed to acquire from Simply Self Storage, a portfolio company of a private real estate fund managed by Brookfield Asset Management, two REITs that own a portfolio of self storage properties for an aggregate purchase price of approximately $1.325 billion.
The portfolio consists of 112 self storage properties containing approximately 8.7 million rentable square feet, configured in over 68,000 storage units and located across 17 states and Puerto Rico. Following the closing of the acquisiton, the company expects to rebrand nearly all of the Portfolio under its iStorage brand, and the company's iStorage management platform will operate the properties.
The company also expects to use such net proceeds to fund $64.0 million in additional capital contributions to the JV to spin-out the six self storage properties in the portfolio located in Puerto Rico and a single self storage property in the portfolio located in Ohio (the "Distribution Properties"), which will be distributed by the JV to the company immediately following the closing of the acquisition. The balance of the equity capital needed by the JV to complete the acquisition will by provided by the JV Investor that has committed approximately $482.3 million to the JV in exchange for a 75% ownership interest. The size of the JV Investor's capital commitment may be decreased to a minimum of approximately $241.1 million (with a corresponding increase in the capital provided by the company) in the event the JV investor is not able to complete the arrangements for all of the co-investment capital that the JV Investor is currently targeting to fund its capital contributions to the JV.
The JV has signed a non-binding term sheet with two institutional lenders to provide approximately $643.0 million in 10-year secured debt financing carrying an interest rate of 4.34% per annum, which if obtained, would be used by the JV to fund the balance of the purchase price for the acquisition. Although the company expects the JV's debt financing to be agreed as outlined in the term sheet, the term sheet does not represent a binding commitment, and there can be no assurance that the debt financing needed by the JV to complete the acquisition will actually be arranged on the above terms or at all.
BMO Capital Markets Corp. will act as book-running manager and sole underwriter for the offering. The underwriter proposes to offer the shares from time to time in negotiated transactions or otherwise at market prices prevailing at the time of sale, at prices related to prevailing market prices or at negotiated prices.
The offering of the common shares will be made under an effective shelf registration statement filed with the Securities and Exchange Commission ("SEC") and only by means of a preliminary prospectus supplement and accompanying prospectus. Copies of the preliminary prospectus supplement and accompanying prospectus related to the offering can be obtained, when available, by visiting the SEC website at www.sec.gov or by contacting:
This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale of these securities would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
About National Storage Affiliates Trust
National Storage Affiliates Trust is a Maryland real estate investment trust focused on the ownership, operation and acquisition of self storage properties located within the top 100 metropolitan statistical areas throughout the United States.