Shurgard Storage Ctr (NYSE:SHU)
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From Jul 2019 to Jul 2024
Shurgard Storage Centers, Inc. (NYSE:SHU), a leading
self-storage real estate investment trust (REIT) in the United States
and Europe, announced it has acquired today the 12.77% interest in
Shurgard Europe held by entities affiliated with Fremont Realty
Capital for a purchase price of EUR 80 million (approximately $97
million) in cash. In connection with the acquisition, the Company also
announced the increase of its credit facility by $150 million.
With this acquisition, Shurgard Europe is now a wholly-owned
subsidiary of Shurgard. Shurgard Europe, the largest owner and
operator of self-storage in Europe, has been operating for over ten
years. It owns, or has an interest in, approximately 140 self-storage
properties in principal cities throughout Western Europe.
Commenting on the transaction, Dave Grant, Shurgard president and
chief operating officer, said, "This concludes a very successful phase
in our European venture for both Shurgard and its capital partners.
This group of investors joined us in 1999 when we had less than 20
stores in Europe. With their support over these past years, we have
succeeded in building a great portfolio of properties that has
established us as the clear leader in the self-storage industry in
Europe. We are also now well positioned to continue to capitalize on
long-term growth opportunities that lay in front of us."
"Fremont has been an active participant in Shurgard Europe's
development during its 5 1/2 years as a shareholder," said Matthew
Reidy, Managing Director of Fremont Realty Capital in San Francisco.
He added, "Our success with this investment is a direct result of the
tireless efforts of a great management team that continues to
capitalize on one of the best market opportunities in real estate
today: self-storage in Europe." The investment was Fremont's third
with Shurgard following two successful joint ventures involving the
expansion of Shurgard's U.S. portfolio. Fremont Realty Capital is the
real estate merchant banking subsidiary of Fremont Group, a private
investment firm based in San Francisco, California.
Mr. Grant continued, "Additionally, now that we fully own and
control Shurgard Europe, we will be able to take full advantage of
numerous opportunities we see to integrate operations with the U.S.
group and gain economies of scale. In anticipation of this
acquisition, the Company has already begun to streamline some of the
management and overhead positions." The acquisition of the Fremont
interest will be dilutive to earnings and Funds From Operations (FFO)
in the short-term, since the acquisition was financed by borrowings
under the Company's term facility discussed below. Management projects
that FFO for the balance of 2005 will be reduced by about $0.05 per
share. Additionally, the Company anticipates reporting one-time
charges in connection with the integration process of approximately
$1.3 million or $0.03 per share of FFO in the second quarter with an
additional $500,000 estimated over the balance of 2005.
In addition to the increase in the credit facility, the Company
also announced the amendment of its term facility to extend its
maturity to February 14, 2008, the same maturity date as the existing
revolving credit facility. Harrell Beck, executive vice president and
chief investment officer, said, "The increase in the credit facility
gives us the flexibility to finance the acquisition of the Fremont
interest and demonstrates continued confidence in the Company's
business strategy from our bank group. Management felt that the
current liquidity in the bank market represented a great opportunity
for the Company to extend the term of some of its bank debt at
attractive rates." Mr. Beck also stated, "We are also evaluating a
number of other longer-term financing options, especially given the
exceptional interest in the self-storage asset class, evidenced by
recent transactions in the sector."
About Shurgard Storage Centers, Inc.
Shurgard Storage Centers, Inc. is a real estate investment trust
headquartered in Seattle, Washington. Shurgard specializes in all
aspects of the self-storage industry and operates a network of over
630 operating storage centers located throughout the United States and
in Europe.
Cautionary and Forward-Looking Statements
This press release contains statements that are not based on
historical fact and are "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995.
Statements in this release concerning the beliefs, expectations,
intentions, future events, future performance, business prospects and
business strategy in the United States and Europe, including
statements regarding projections for 2005 and beyond; are based on
several assumptions. If any of these assumptions are not satisfied or
prove to be incorrect, actual results could differ materially from
those indicated in the forward-looking statements, depending on a
variety of factors including, but not limited to, Shurgard's ability
to implement its business strategy, competition in the market, as well
as other risk factors as described more fully in Shurgard's Annual
Report on Form 10-K for the year ended December 31, 2004, filed with
the Securities and Exchange Commission on March 29, 2005 and its
report on Form 10-Q for the quarter ended March 31, 2005, filed on May
10, 2005. The information presented in this release reflects
Shurgard's expectations as of the date of this release. Except as
required by law, Shurgard undertakes no obligation to update or revise
the information herein.