Public Storage Buys Rival in $5.6B Stock Deal
The U.S. self-storage market is set for another round of consolidation as Public Storage moves to acquire National Storage Affiliates in an all-stock transaction valued at $5.63 billion, or roughly $10.5 billion including debt. The deal, announced Monday, would create a company with a combined market capitalization of about $57 billion and an enterprise value approaching $77 billion—marking one of the largest mergers in the sector's history.
The acquisition expands Public Storage's national reach by adding more than 1,000 properties spanning 69 million rentable square feet and 550,000 units across 37 states and Puerto Rico. Once finalized, the combined portfolio will encompass nearly 4,600 facilities in 42 states, a roughly 30% increase in total properties for Public Storage.
Under the agreement, National Storage shareholders will receive 0.14 shares of Public Storage common stock for each share they hold, translating to an offer value of about $41.68 per share based on Friday's closing price. The boards of both companies have approved the transaction, which is expected to close in the third quarter pending shareholder approval and customary conditions.
Public Storage's shares dipped 3% in premarket trading following the announcement, while National Storage jumped 27%.
Incoming CEO Tom Boyle, currently chief financial and investment officer, will lead the combined company beginning April 1. He has described the acquisition as a geographically complementary fit that strengthens Public Storage's exposure to high-growth Sun Belt markets.
The acquisition coincides with Public Storage's broader strategic realignment. In February, the company announced plans to relocate its headquarters from Glendale, California, to Frisco, Texas—a move aimed at tapping what it called a deep local talent pool and positioning the REIT for expansion. The Texas office totals more than 120,000 square feet, although Public Storage will continue to maintain a presence in Southern California.
Financially, the firm has secured $4 billion in committed bridge financing from Goldman Sachs and Wells Fargo, split evenly between corporate and joint-venture loans. A portion of the debt will fund a new joint venture that will hold roughly 313 of National Storage's high-performing properties valued at $3.3 billion. National Storage unitholders will retain an 80% stake in the venture, with Public Storage holding the remaining 20%.
The combined entity expects to generate $110 million to $130 million in annual synergies within three to four years, driven by operating efficiencies, revenue enhancements, and management cost savings.
The company projects the deal will be accretive to funds from operations per share in its first year. Public Storage also plans to repay National Storage's existing bank debt and senior unsecured notes while assuming mortgage obligations and preferred equity. About $300 million will be directed toward rebranding, technology upgrades, and modernization across National Storage's portfolio.
The merger follows a period of intense competition and price escalation in the self-storage REIT market. In 2023, Public Storage lost a bid to rival Extra Space Storage for Life Storage, which paid $12.7 billion for that acquisition, but subsequently acquired Simply Self Storage from Blackstone for $2.2 billion.
Industry analysts view the latest deal as a sign that leading storage operators are positioning for steadier long-term demand amid lingering macroeconomic uncertainty. After pandemic-era surges in occupancy and rent growth, the sector has faced headwinds from rising interest rates and a cooling housing market. Public Storage's move suggests confidence that consolidating operating platforms will help sustain returns as the industry emerges from its current downcycle.
Public Storage has enlisted Goldman Sachs, Wells Fargo, and Eastdil Secured as financial advisers, with Wachtell, Lipton, Rosen & Katz serving as legal counsel. National Storage is represented by Morgan Stanley and Clifford Chance US LLP.
Source: GlobeSt/ALM