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CubeSmart (NYSE: CUBE) today announced that it has entered into an agreement to acquire 100% of the outstanding partnership units of LAACO, Ltd. (“LAACO”), the owner of the Storage West Platform for approximately $1.69 billion, which includes approximately $40.9 million of LAACO debt that will be repaid at, or shortly after, the closing, Storage West is the owner and operator of 59 self-storage assets in the highly desired western markets of Southern California (22), Phoenix (17), Las Vegas (13),and Houston (7). Two of these properties are owned by two separate joint ventures, each owned fifty percent by LAACO.
“The Storage West portfolio represents a very strategic transaction that will enhance our portfolio and further diversify our geographic exposure,” commented Christopher P. Marr, President and Chief Executive Officer of the Company. “This immediately accretive transaction is a unique opportunity to acquire a sizable portfolio of high-quality assets across the Southwest. The properties are all in top-10 MSAs that represent key growth markets with strong demographics that perfectly fit our external growth strategy and complement our existing portfolio.”
The Company expects to finance the purchase price at closing through a combination of (i) the net proceeds from the issuance and sale of the Company’s equity securities on or prior to the closing date and (ii) the proceeds from new long-term debt financing, such as a term loan or debt securities, which the Company intends to pursue prior to the closing of the acquisition. If such debt financing is unavailable, the Company intends to finance any remaining portion of the acquisition purchase price with proceeds from a committed $1.0 billion senior unsecured bridge loan facility and/or unsecured revolving credit facility.
Karen Hathaway, President and Managing Partner of LAACO, Ltd., said, “We are pleased that this transaction will benefit both the unitholders who have supported our company over the years andthe shareholders of CubeSmart. We are also gratified that our operations will continue in the good hands of a skilled management teamwhose values so closely align with ours, and whose success includes solid growth, commitment to their employees, and dedication to customersatisfaction, sustainability, and diversity.”
The transaction is expected to close in the fourth quarter of 2021,and is subject to customary closing conditions. No assurance can be given that the transaction will be consummated on contemplated terms,or at all. Additional information on the transaction can be found in the presentation posted on our investor relations website at investors.cubesmart.com.