NEW YORK—W. P. Carey and Extra Space Storage have entered into a net lease agreements for 36 self-storage properties owned by W. P. Carey. The deal essential converts W.P. Carey's operating assets into long-term triple-net leases.
The properties will be triple-net leased by Extra Space Storage for 25 years. The leases include termination rights for both companies on the 10- and 20-year anniversaries, based on certain performance metrics. Beginning on the three-year anniversary, W. P. 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.
“The structure allows us to maintain our exposure to self-storage, an asset class we have invested in for over 15 years and know well,” says W.P. Carey CEO Jason Fox. “It also underscores self-storage as a potential source of additional net lease investment opportunities.”
The transaction includes a large majority of the self-storage properties that W. P. Carey acquired in its merger with CPA:17, representing approximately 90% of its total operating self-storage net operating income.
For Extra Storage Space, the deal add five more assets to its platform in the boroughs of New York City.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
