Salt Lake City’s Extra Space Storage Inc. has agreed to a lease agreement for 36 self-storage properties owned by W.P. Carey Inc. of New York City. Carey is a real estate investment trust that invests in properties leased to single tenants via triple-net leases.
Extra Space Storage owns and/or operates 1,696 self-storage properties in 40 states; Washington, D.C.; and Puerto Rico. The company’s properties comprise approximately 1.2 million units and approximately 130 million square feet of rentable space. The company is the second-largest owner and/or operator of self-storage stores in the United States and is the largest self-storage management company in the United States.
The properties will be triple-net leased by Extra Space Storage for a period of 25 years. The leases include termination rights for both companies on the 10- and 20-year anniversaries, based on certain performance metrics. Commencing on the three-year anniversary, Carey also has the right to terminate the leases in the event of a sale, with Extra Space Storage retaining the right of first offer to acquire the properties.
“Extra Space is pleased to announce this creative and mutually beneficial net lease transaction and to deepen and expand our long-standing relationship with W.P. Carey,” said Joe Margolis, CEO of Extra Space Storage. “The transaction allows us to expand our capital-light growth model on 31 assets we already managed, and to add five more assets to our platform in the boroughs of New York City.”
Jason Fox, CEO of Carey, said, “We are delighted with today’s announcement, which represents an innovative win-win for both companies. We have great respect for Extra Space Storage, which we expect to rank among our top 10 tenants, and look forward to continuing our long-standing relationship with them.”