Extra Space Storage netted $431 million in a public stock offering to help pay for its $1.4 billion acquisition of SmartStop Self Storage.

The Salt Lake City, UT-based self-storage REIT sold 6,325,000 shares of common stock at $68.15 per share. The underwriters — Wells Fargo Securities, Bank of America Merrill Lynch and Citigroup — bought 825,000 of those shares. The final proceeds don’t include deductions for the underwriters’ discounts and commissions.

Extra Space’s stock closed June 23 at $67.16 cents per share.

Funding the deal

Extra Space Storage will use the proceeds to pay off its existing lines of credit, which total $169 million, according to a filing with the U.S. Securities and Exchange Commission. The lines of credit went toward previous acquisitions and general corporate expenses.

The remaining proceeds from the stock offering will be earmarked for the SmartStop deal, which is scheduled to close in the second half of this year.

Extra Space plans to finance the remaining costs of the SmartStop acquisition. Extra Space will borrow about $600 million in the form of CMBS loans, and another $300 million will be financed by the company’s secured lines of credit, according to an investor presentation on its website.

Once the deal wraps up, Extra Space will gain ownership of 121 SmartStop facilities, along with management contracts for 43 facilities owned by SmartStop affiliates. The acquired locations will add about 9.9 million square feet of rentable space, or more than 75,000 units, to the Extra Space portfolio.

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Alexander Harris