Shurgard Storage Centers signed a $360 million credit facility last month, replacing a $200 million deal due to expire in September. "We noticed the market was tightening and wanted to expand the bank group," said Jeffrey Szorik, assistant v.p., explaining why new financing was pursued now. "Diversity in capital sources is in our best interest long-term with more and more bank consolidations." The facility comprises a corporate revolver. Shurgard, a self-storage real estate investment trust, is based in Seattle.
While the company is three decades old, the self-storage industry is still relatively unknown, said Szorik. "If you investigate the fundamentals, it's a strong industry regardless of the macro economic conditions," he said. "Life events that are positive and negative--marriage, going away to college--happen regardless of the economy."
The company has both commercial and residential customers looking for temporary storage space. "We're located in drugstores, small shopping centers," said Szorik, adding that each space is typically 350 square feet. Most residential customers are looking for space while in the process of moving. Businesses are often looking for place to store records and inventory.
Bank of America leads the deal and was the original lead. The company did not go out to bid. "We've had a strong relationship with our banking group," said Szorik. "We're delighted with B of A's service and pricing and couldn't think of anyone else." There are 12 banks in the syndicate. Pricing is 1 1/4 % over LIBOR. The company has no other lines of credit.