Salt Lake City-based Extra Space Storage Inc. (NYSE:EXR) and Life Storage, Inc. have successfully completed their merger, creating the largest self-storage operator in the US, following shareholder approval. The combined entity, boasting over 3,500 locations and more than 270 million square feet of rentable storage space, now serves over two million customers. The merger also places the combined company among the top ten Real Estate Investment Trusts (REITs) by enterprise value in the MSCI U.S. REIT Index, valued at around $46 billion.
Extra Space CEO Joe Margolis expressed confidence in the smooth integration and synergy potentials of the merged company, anticipating at least $100 million in underwritten annual run-rate synergies due to the increased scale.
The merger unites two industry leaders, enhancing diversification, and increasing operational and financial benefits for shareholders. The merger offers enhanced diversification, creating a broad portfolio of quality storage assets in markets with significant demand and positive demographic trends. With their combined advanced technology and data analytics, the new entity is poised to drive net operating income growth and deliver exceptional service.
In addition to operational synergies, the merger will serve as a driver for accelerated external growth via a scaled and growing third-party management, joint venture, and bridge loan platforms. Financially, the merger is expected to be accretive to Core FFO per share within the first year and leverage-neutral. The board of Extra Space has expanded from 10 to 13 directors, including three directors from Life Storage.