The buy-back deal calls for Shurgard to make an initial payment of $7.5-million by Jan. 15, with the remainder due before the end of the first quarter of 2001, when the deal officially closes. There's a $45-million bank loan hanging over the properties that Shurgard will either have to pay off or assume.

Shurgard had held the option since the relationship with the Bay Area merchant bank began in 1988, when Fremont Partners began bankrolling Shurgard's expansion effort. The venture status let Shurgard develop and lease its look-alike storage facilities off the corporate books. Now that the properties are built, leased, and earning revenues, Shurgard wants them on the books. Similar relationships exist between the two in other markets both in the U.S. and Europe.