Storage USA raises $135.2 million

September 24, 1994|By Kevin L. McQuaid | Kevin L. McQuaid,Sun Staff Writer

Storage USA Inc. yesterday announced it raised $135.2 million through a secondary stock offering, a move designed to finance the acquisition of 29 new miniwarehouse facilities and provide working capital.

The Columbia-based real estate investment trust, which went public in March with a $119.6 million initial offering, sold 5.2 million new shares of common stock at $26 a share, a 20 percent increase from its IPO price.

"The new offering makes us more liquid, and answers the needs of institutional investors who wanted more shares," said Thomas E. Robinson, the company's president and chief operating officer.

Storage USA intends to use the proceeds from the latest offering to acquire new property and capitalize on what it believes is "the current fragmentation of the self-storage industry," according to a prospectus registered with the U.S. Securities and Exchange Commission. The company will pay $98.2 million for the new facilities, including two in Maryland.

The company's stock sale also represents one of the largest secondary offerings among REITs nationally in 1994. After the offering, the company's stock closed yesterday at $26.375, up 37.5 cents on the New York Stock Exchange.

Underwriters were Goldman, Sachs & Co.; Dean Witter Reynolds Inc.; A. G. Edwards & Sons Inc.; and Morgan Keegan & Co. Inc.

Storage USA is one of four Baltimore-based equity REITs. With the offering and acquisitions, Storage USA's portfolio will increase to 86 projects containing 5.6 million square feet, valued $255 million. The REIT also operates or manages 28 facilities for third parties, containing 1.8 million square feet.

For the period ended June 30, Storage USA generated net income of $10.3 million, or 85 cents a share, on revenues of $21.1 million. Its funds from operations, a key REIT gauge of performance, were $13.2 million, according to the prospectus.

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