BUFFALO—Sovran Self Storage Inc. said Monday it had acquired an additional 1.3 million square feet of self storage facilities in eight separate transactions totaling $130 million. Sixteen of the facilities were purchased by SSS for a total of $96 million, while the remaining three were acquired for Sovran HHF Storage Holdings LLC, a joint venture in which the Buffalo-based REIT owns a 20% interest.
All 19 properties are located in markets where SSS, which operates under the Uncle Bob's brand, already has a presence. They include seven facilities in New Jersey, seven in the St. Louis metro area and one each in metro New York City, Philadelphia, Atlanta, Chicago and San Antonio.
The expected one-year cap rate on the properties ranges between 6.5% and 6.75%. SSS acquired them through a combination of the remaining funds from its $175-million 10-year term note issued in April, proceeds from its at-the-market program and advances on its line of credit. The company plans to rebrand all 19 properties as Uncle Bob's, thereby bringing its total to more than 500.
“This is a terrific group of stores,” says David Rogers, the REIT's CEO. “They fit our strategy of acquiring good properties in quality markets in which we can apply our marketing and management platforms to add significant value. They are great additions to the Uncle Bob's brand.”
In a note to investors Monday, analysts at Robert Baird & Co. note that with these acquisitions, SSS has already met its target of $100 million in acquisitions for the balance of 2014 following the first quarter. “We expect SSS will revisit its full-year outlook, particularly in regard to acquisitions, with 2Q14 earnings,” the analysts wrote.
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Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
