U-Store-It Trust has tapped Lehman Brothers and Wachovia Securities, the banks that underwrote its initial public offering, to lead its new $150 million credit line. Robert Amsdell, ceo of the Cleveland-based self-storage real estate investment trust, said the company will use the line, which has a $50 million expansion option, to finance its heavy acquisition plans over the next few years. This is the REIT's first credit line.
U-Store-It selected Lehman and Wachovia based on the success of the IPO and the banks' reputation in the sector. "They met our needs and knew our business," Amsdell said. "It was a combination of confidence on our part and confidence on their part." Steven Osgood, cfo, added that Lehman also worked on a handful of debt transactions with the REIT. The three-year line is undrawn and pricing stands at LIBOR plus 213 basis points, Osgood said, adding that an acquisition target has not been announced for next year.
The company previously made buys through its joint-venture partners, but decided to go public for access to the capital markets. Proceeds have been fully used for debt repayment and new purchases, including a large Chicago-based portfolio. The REIT is making an aggressive acquisition and development push particularly because the mom and pop-owned storage firms are ripe for acquisition. "This is the best time ever to be a consolidator in the industry," Amsdell said, adding that 80% of the 37,000 US storage facilities are privately owned and operated.