Public Storage announced on Mar. 16 that it will acquire National Storage Affiliates Trust in an all-stock deal valued at $10.5 billion, including debt. The transaction is expected to close in the third quarter and will significantly expand Public Storage’s national holdings, especially in Sun Belt markets.
The acquisition is notable as it comes shortly after Public Storage revealed plans to move its headquarters to Texas, marking its first headquarters shift since its founding in 1972. The combined company will have a market capitalization of about $57 billion and an enterprise value of approximately $77 billion.
National Storage Affiliates, based in Greenwood Village, Colorado, owns more than 1,000 properties with roughly 69 million rentable square feet and about 550,000 storage units across 37 states and Puerto Rico. Under the terms of the deal, Public Storage will take full ownership of 488 NSA properties while another 313 properties will be placed into a joint venture between Public Storage and NSA’s limited partners. This joint venture portfolio is valued at around $3.3 billion and will be financed with about $2.2 billion in secured property level debt.
Financing for the acquisition includes $4 billion in committed bridge loans from Goldman Sachs Bank USA and Wells Fargo, which are expected to convert into long-term secured mortgage financing later on. Tom Boyle, Public Storage’s Chief Financial Officer who is set to become CEO on April 1, said the acquisition would help expand the company’s market reach as the self-storage sector recovers from a cyclical slowdown.
Following completion of the transaction, Public Storage will operate nearly 4,600 properties nationwide—including more than 3,600 wholly owned facilities—boosting its property count by about 30 percent and increasing rentable square footage by 27 percent to roughly 328 million square feet. About 38 percent of the combined portfolio will be located in southern U.S. states known as the Sun Belt.
Texas remains a key market for both companies; at the end of last year National Storage Affiliates owned 174 facilities there while Public Storage controlled 477 locations—making Texas their largest market. Houston stands out among metros with over 128 facilities totaling about 10.4 million rentable square feet and average occupancy above 90 percent.
Executives expect that operational efficiencies from this merger could generate between $110 million and $130 million in cost savings over several years.
