SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 2)
STORAGE USA, INC.
_______________________________________________________________
(Name of Issuer)
COMMON STOCK, $0.01 PAR VALUE
_______________________________________________________________
(Title of Class of Securities)
861907 10 3
_______________________________________________________________
(CUSIP Number)
PAUL E. SZUREK
SECURITY CAPITAL U.S. REALTY
69, ROUTE D'ESCH
L-1470 LUXEMBOURG
(352) 48 78 78
_______________________________________________________________
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
JULY 1, 1996
_______________________________________________________________
(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Sche-
dule 13G to report the acquisition which is the subject of this
Schedule 13D, and is filing this schedule because of Rule 13d-
1(b)(3) or (4), check the following box / /.
Check the following box if a fee is being paid with this state-
ment / /. (A fee is not required only if the reporting per-
son: (1) has a previous statement on file reporting beneficial
ownership of more than five percent of the class of securities
described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less
of such class.) (See Rule 13d-7.)
Note: Six copies of this statement, including all
exhibits, should be filed with the Commission. See Rule
13d-1(a) for other parties to whom copies are to be sent.
(Continued on following pages)
Page 1 of 12 Pages
CUSIP No. 861907 10 3 13D Page 2 of 12 Pages
1 NAME OF PERSON
SECURITY CAPITAL U.S. REALTY
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) / /
(b) /x/
3 SEC USE ONLY
4 SOURCE OF FUNDS*
BK, OO
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) / /
6 CITIZENSHIP OR PLACE OF ORGANIZATION
LUXEMBOURG
7 SOLE VOTING POWER
NUMBER OF 7,053,754 (SEE ITEM 5)
SHARES
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY -0-
EACH
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON 7,053,754
WITH
10 SHARED DISPOSITIVE POWER
-0-
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
7,053,754 (SEE ITEM 5)
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
28.7 % (SEE ITEM 5)
14 TYPE OF PERSON REPORTING*
CO
*SEE INSTRUCTIONS BEFORE FILLING OUT
CUSIP No. 861907 10 3 13D Page 3 of 12 Pages
1 NAME OF PERSON
SECURITY CAPITAL HOLDINGS S.A.
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) / /
(b) /x/
3 SEC USE ONLY
4 SOURCE OF FUNDS*
BK, OO
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) / /
6 CITIZENSHIP OR PLACE OF ORGANIZATION
LUXEMBOURG
7 SOLE VOTING POWER
NUMBER OF 7,053,754 (SEE ITEM 5)
SHARES
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY -0-
EACH
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON 7,053,754
WITH
10 SHARED DISPOSITIVE POWER
-0-
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
7,053,754 (SEE ITEM 5)
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
28.7% (SEE ITEM 5)
14 TYPE OF PERSON REPORTING*
CO
*SEE INSTRUCTIONS BEFORE FILLING OUT
ITEM 1. SECURITY AND ISSUER.
This Amendment relates to shares of common stock, par
value $0.01 per share ("Common Stock"), of Storage USA, Inc., a
Tennessee corporation ("Storage"). The principal executive
offices of Storage are located at 10440 Little Patuxent Park-
way, Columbia, Maryland 21044.
ITEM 2. IDENTITY AND BACKGROUND.
This Amendment is filed by Security Capital U.S. Re-
alty ("Security Capital U.S. Realty"), a corporation organized
and existing under the laws of Luxembourg, and by Security Cap-
ital Holdings S.A. ("Holdings"), a corporation organized and
existing under the laws of Luxembourg and a wholly owned sub-
sidiary of Security Capital U.S. Realty (together with Security
Capital U.S. Realty, "USRealty"). The business objective of
USRealty is to become Europe's preeminent publicly-held real
estate operating company with strategic investments in leading
"value-added" real estate operating companies in the United
States. USRealty intends to acquire 25% to 45% of the common
stock of a limited number of U.S. real estate operating compa-
nies with specific market niches and the potential to be lead-
ers in their respective peer groups. USRealty intends to maxi-
mize shareholder returns in these companies by investing suf-
ficient capital and, by obtaining representation on the boards
of directors and committees thereof, participating with manage-
ments in developing and implementing strategies for long-term
growth in per share operating results. The principal offices
of USRealty are located at 69, route d'Esch, L-1470, Luxem-
bourg.
During the last five years, to the best of USRealty's
knowledge, neither USRealty nor any of its executive officers
or directors has been convicted in a criminal proceeding (ex-
cluding traffic violations or similar misdemeanors) or has been
a party to a civil proceeding of a judicial or administrative
body of competent jurisdiction as result of which USRealty or
such person was or is subject to a judgment, decree, or final
order enjoining future violations of, or prohibiting or man-
dating activities subject to, federal or state securities laws,
or finding any violation with respect to such laws.
Each executive officer and each director of USRealty is a
citizen of the United States but, with the exception of one
director, all executive officers and directors are residents of
various European countries. The name, business address, and
present principal occupation (including the name, principal
business and address of the corporation or organization in
which such employment is conducted) of each executive officer
-4-
and director is set forth in Exhibit 1 to this Schedule 13D and
is specifically incorporated herein by reference.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
As previously reported, pursuant to a Stock Purchase
Agreement, dated as of March 1, 1996, by and among Storage,
Security Capital U.S. Realty and Holdings (the "Stock Purchase
Agreement"), subject to the terms and conditions thereof, Stor-
age agreed to sell and USRealty agreed to purchase up to
7,028,754 shares of Common Stock (such Common Stock, the
"Shares"). Security Capital U.S. Realty agreed to advance to
Holdings the funds necessary to purchase the Shares as required
by the Stock Purchase Agreement, and guaranteed the performance
by Holdings of its obligations thereunder. The aggregate pur-
chase price for the Shares to be paid to Storage is
$220,000,000 (the "Total Equity Commitment"). These funds
have, in part, been and will, in part, be obtained by USRealty
from equity subscriptions which have been received by USRealty
from various international investors, including U.S. investors.
These funds will also be obtained by USRealty from draw downs
under USRealty's $200,000,000 revolving credit facility pursu-
ant to a Facility Agreement (the "Facility Agreement"), dated
June 12, 1996, by and among Security Capital U.S. Realty, Hold-
ings, Commerzbank Aktiengesellschaft, as arranger and col-
lateral agent, Commerzbank International S.A., as administra-
tive agent and the financial institutions listed in Schedule 1
thereto.
USRealty previously filed a Schedule 13D with respect
to its investment in Storage, in which it discloses that USRe-
alty may be deemed to beneficially own up to 7,053,754 shares
of Common Stock because of its acquisition of 1,948,882 of
shares of Common Stock on March 19, 1996, because of its right
to acquire an additional 5,079,872 shares of Common stock and
because of its ownership of an additional 25,000 shares of Com-
mon stock purchased on January 18, 1996.
As previously reported, on March 19, 1996, pursuant to
the Stock Purchase Agreement, USRealty purchased 1,948,882
shares of Common stock (such shares, the "Initial Shares") at a
price of $31.30 per share at an initial closing (the "Initial
Closing"). The aggregate purchase price paid to Storage for
the Initial Shares was $61,000,006.60. Security Capital U.S.
Realty advanced to Holdings the funds necessary to purchase the
Initial Shares as required by the Stock Purchase Agreement.
These funds were obtained by USRealty from equity sub-
scriptions which have been received by USRealty from various
international investors, including U.S. investors.
-5-
On June 5, 1996, the shareholders of Storage approved
an amendment (the "Charter Amendment") to Storage's charter
amending ownership limitations therein to permit USRealty to
acquire up to 37.5% of the capital stock of Storage and to make
certain other modifications to facilitate Storage's continued
qualification as a real estate investment trust for federal
income tax purposes (a "REIT"). On July 1, 1996, Storage
filed the Charter Amendment with the Secretary of State of the
State of Tennessee, and the Charter Amendment became effective.
The Charter Amendment and related matters are more fully de-
scribed in, and the Charter Amendment is Appendix D to, the
proxy statement relating to Storage's June 5, 1996 meeting of
shareholders, dated April 26, 1996 and filed with the Securi-
ties and Exchange Commission on April 29, 1996. A copy of the
Charter Amendment is attached hereto as Exhibit 5 and is spe-
cifically incorporated herein by reference, and the description
herein of such amendment is qualified in its entirety by refer-
ence to such amendment.
A copy of the Stock Purchase Agreement, and the vari-
ous Exhibits thereto, is attached hereto as Exhibit 2 and is
specifically incorporated herein by reference, and the descrip-
tion herein of such agreement and the Exhibits thereto is qual-
ified in its entirety by reference to such agreement and Exhib-
its. A copy of the Facility Agreement is attached hereto as
Exhibit 4 and is specifically incorporated herein by reference,
and the description herein of such agreement is qualified in
its entirety by reference to such agreement.
ITEM 4. PURPOSE OF TRANSACTION.
The purchase of the Shares is for the purpose of own-
ership and not with a view to or for sale in connection with
any distribution thereof. USRealty has no present intention or
plan to effect any distribution of the Shares.
The Stock Purchase Agreement provided for USRealty's
purchase of the Initial Shares at a price of $31.30 per share
at the Initial Closing. The Stock Purchase Agreement also pro-
vides that, at such time as Storage may determine subject to
the terms of the Stock Purchase Agreement, USRealty will pur-
chase the remaining 5,079,872 Shares to be purchased pursuant
to the Stock Purchase Agreement (the "Subsequent Shares") at a
price of $31.30 per share, provided that if the sale of the
Subsequent Shares to USRealty shall not have occurred by Decem-
ber 1, 1996, USRealty will have the right, at its election, to
purchase the Subsequent Shares on or before December 31, 1996
at a price of $31.30 per share.
-6-
The Stock Purchase Agreement also provided that Stor-
age would submit to a vote of its shareholders for their ap-
proval the Charter Amendment.
The Initial Closing was subject to various conditions,
including (i) an irrevocable waiver of application to USRealty
of the ownership limitations contained in the Company's charter
with respect to the Initial Shares plus 25,000 shares of Common
Stock owned by USRealty as of March 1, 1996, (ii) an amendment
to the partnership agreement of SUSA Partnership, L.P., the
entity through which Storage currently conducts its business,
to exclude USRealty from the operation of the provisions
thereof applicable to "Affiliates" of Storage, (iii) the con-
tinued treatment of Storage as a REIT, and (iv) satisfaction of
various customary conditions. In addition, if the initial
closing had not have occurred on or prior to May 31, 1996, the
Stock Purchase Agreement provided that it could be terminated
by either party, unless such party were then in default there-
under. The second closing, at which the Subsequent Shares are
to be purchased by USRealty, is subject to various conditions,
including (i) approval by Storage's shareholders of the trans-
action contemplated by the Stock Purchase Agreement, (ii) ap-
proval by Storage's shareholders of the proposed amendment to
Storage's charter to amend the ownership limitations to permit
USRealty to acquire up to 37.5% of the capital stock of Storage
and to make certain other modifications to facilitate Storage's
continued qualification as a REIT, (iii) the continued treat-
ment of Storage as a REIT, and (iv) satisfaction of various
customary conditions. Subsequent closings, if any, also are
subject to certain conditions.
As contemplated by the Stock Purchase Agreement, the
parties entered into a Strategic Alliance Agreement and a Reg-
istration Rights Agreement at the initial closing. Such agree-
ments are attached as Exhibits to the previously filed Amend-
ment No. 2 to Schedule 13D, are specifically incorporated
herein by reference, and the description herein of such agree-
ments is qualified in its entirety by reference to such agree-
ments. Pursuant to the Strategic Alliance Agreement, USRealty
is entitled to certain rights and is subject to certain re-
strictions, including the following: (i) from and after June
5, 1996, the date on which Storage's shareholders approved the
transactions contemplated by the Stock Purchase Agreement (the
"Shareholder Approval Date") until the next annual or special
meeting at which any directors are to be elected, USRealty has
the right to have two directors on Storage's board of direc-
tors, and after such next annual or special meeting until USRe-
alty no longer owns at least 20% of the outstanding Common
Stock, USRealty generally has the right to nominate its pro-
portionate share of Storage's board of directors, (ii) from and
-7-
after the Shareholder Approval Date until USRealty no longer
owns at least 20% of the outstanding Common Stock, USRealty has
the right to obtain certain operating and financial informa-
tion, (iii) from and after the Shareholder Approval Date until
USRealty no longer owns at least 15% of the outstanding Common
Stock, USRealty has the right to participate in Storage's fu-
ture security offerings by purchasing its proportionate share
of the securities offered therein, (iv) during a standstill
period of five years (which period is subject to early termina-
tion in certain circumstances but, if not terminated early,
shall be automatically extended for one-year increments unless
USRealty gives Storage 270 days' notice cancelling such exten-
sions or unless sooner terminated upon certain events), USRe-
alty has subject to certain limitations and restrictions relat-
ing to voting of its shares of Common Stock, acquisitions of
additional shares of Common Stock (generally limited to 37.5%
of the outstanding shares of Common Stock), transfers of its
shares of Common Stock and various other matters, and (v) as
long as USRealty owns 20% of the outstanding shares of Common
Stock and as long as the standstill period (including exten-
sions) is in effect, Storage may not take certain specified
corporate actions relating to incurrence of indebtedness, third
party property management, investments outside the self-storage
facilities segment, REIT termination and reduction of Storage's
interest in SUSA Partnership, L.P. Moreover, pursuant to the
Strategic Alliance Agreement, from and after the Shareholder
Approval Date until USRealty does not own at least 20% of the
outstanding Common Stock, USRealty is to consult with and ad-
vise Storage on certain matters including those concerning
Storage's business strategy, financing arrangements, acquisi-
tion opportunities, economic analysis and investor relations.
Pursuant to the Registration Rights Agreement, Storage has
granted USRealty certain registration rights to facilitate the
resale of its Shares under certain conditions and certain tag-
along rights to sell a portion of its Shares in connection with
certain extraordinary issuances of stock by Storage.
As previously reported, early termination of the wait-
ing period under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, with respect to the Notification and
Report Form previously filed by USRealty was granted on March
15, 1996.
On March 19, 1996, pursuant to the Stock Purchase
Agreement, USRealty purchased the Initial Shares. The ag-
gregate purchase price paid to Storage for the Initial Shares
was $61,000,006.60. Security Capital U.S. Realty advanced to
Holdings the funds necessary to purchase the Initial Shares as
required by the Stock Purchase Agreement. The conditions to
-8-
closing such purchase described above were all either satisfied
or waived.
In addition to the purchase of the Subsequent Shares
as contemplated by the Stock Purchase Agreement, USRealty in-
tends to review on a continuing basis its investment in Storage
and may increase such investment to up to 37.5% of the capital
stock of Storage (including all of the Shares to be acquired
pursuant to the Stock Purchase Agreement), as permitted by
Storage's charter as amended by the Charter Amendment. Such
increase in USRealty's investment in Storage could be ac-
complished by USRealty's acquisition of securities of Storage
in the open market or otherwise. The extent of any such in-
crease would depend upon the price and availability of
Storage's securities, subsequent developments affecting Stor-
age, Storage's business and prospects, other investment and
business opportunities available to USRealty, general stock
market and economic conditions, tax considerations, and other
factors, including the obtaining of any necessary regulatory
approvals. In addition, USRealty may decide to decrease its
investment in Storage, depending upon its continuing review of
such investment and various other factors including those men-
tioned above.
Except as set forth in this Item 4, USRealty presently
has no plans or proposals that relate to or would result in any
of the actions specified in clauses (a) through (j) of Item 4
of Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
As of July 1, 1996, USRealty may be deemed to ben-
eficially own up to 7,053,754 shares of Common Stock because of
USRealty's acquisition of 1,948,882 of such shares on March 19,
1996, because of USRealty's right to acquire 5,079,872 of such
shares pursuant to and subject to the terms and conditions of
the Stock Purchase Agreement and because of USRealty's owner-
ship of an additional 25,000 shares of Common Stock as of March
1, 1996. If USRealty acquires such additional 5,079,872
Shares, USRealty will own approximately 28.7% of the outstand-
ing Common Stock, and approximately 27.2% on a fully diluted
basis, based on the number of outstanding shares of Common
Stock, the number of outstanding limited partnership units of
SUSA Partnership, L.P. that are redeemable for Common Stock and
the number of outstanding options and other securities convert-
ible into Common Stock. Security Capital Group Incorporated is
the largest holder of the outstanding interests in Security
Capital U.S. Realty (although such ownership is less than 40%)
and may, for purposes of United States securities laws, be
-9-
deemed to control Security Capital U.S. Realty. Security Capi-
tal Group Incorporated disclaims beneficial ownership of the
Shares to be acquired by USRealty.
On January 18, 1996, USRealty purchased 25,000 shares
of Common Stock at $31.25 per share through stock market trans-
actions using general capital funds of USRealty.
On March 19, 1996, pursuant to the Stock Purchase
Agreement, USRealty purchased 1,948,882 shares of Common Stock.
The aggregate purchase price paid to Storage for such shares
was $61,000,006.60.
Except as set forth in this Item 5, to the best knowl-
edge and belief of USRealty, no transactions involving Common
Stock have been effected during the past 60 days by USRealty or
by its directors, executive officers or controlling persons.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDING OR RELATION-
SHIPS WITH RESPECT TO SECURITIES OF THE ISSUER.
As described above in Item 4, the Stock Purchase
Agreement, the Strategic Alliance Agreement and the Registra-
tion Rights Agreement among Storage, Security Capital U.S. Re-
alty and Holdings provide for various rights and restrictions
with respect to Storage's Common Stock.
A copy of the Stock Purchase Agreement, and the vari-
ous Exhibits thereto, is incorporated by reference to the pre-
viously filed Schedule 13D in Exhibit 2 thereto and is specifi-
cally incorporated herein by reference, and copies of the Stra-
tegic Alliance Agreement and the Registration Rights Agreement
are attached to the previously filed Amendment No. 1 to Sched-
ule 13D as Exhibit 2.1 and 2.1, respectively, and are specifi-
cally incorporated herein by reference. The description herein
of such agreements and the Exhibits thereto is qualified in its
entirety by reference to such agreements and Exhibits.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
The following Exhibits are filed as part of this Schedule
13D:
Exhibit 1 - Name, Business Address, and Present Principal
Occupation of Each Executive Officer and Director
of Security Capital U.S. Realty and of Security
Capital Holdings S.A.
Exhibit 2 - Stock Purchase Agreement, dated as of March 1,
1996, by and among Storage USA, Inc., Security
-10-
Capital Holdings S.A. and Security Capital U.S.
Realty (incorporated by reference to Exhibit 10.1
of Storage USA, Inc.'s Current Report on Form 8-K
dated March 7, 1996)
Exhibit 2.1 - Strategic Alliance Agreement, dated March 19,
1996, by and among Storage USA, Inc., SUSA Part-
nership, L.P., Security Capital Holdings S.A. and
Security Capital U.S. Realty
Exhibit 2.2 - Registration Rights Agreement, dated March 19,
1996, by and among Storage USA, Inc., Security
Capital Holdings S.A. and Security Capital U.S.
Realty
Exhibit 3 - Joint filing agreement pursuant to 13d-1(f)(1)
Exhibit 4 - Facility Agreement, dated June 12, 1996, by and
among Security Capital U.S. Realty, Security
Capital Holdings S.A., Commerzbank Aktiengesell-
schaft, as arranger and collateral agent, Com-
merzbank International S.A., as administrative
agent and the financial institutions listed in
Schedule 1 thereto (incorporated by reference to
Exhibit 4 of the Schedule 13D, dated June 21,
1996, filed jointly by Security Capital U.S. Re-
alty and Security Capital Holdings S.A. with re-
spect to the common stock of Regency Realty Cor-
poration)
Exhibit 5 - Amendment to Paragraph 12 of the Charter of Stor-
age USA, Inc. (incorporated by reference to Ap-
pendix D to the proxy statement relating to the
June 5, 1996 meeting of shareholders of Storage
USA, Inc., dated April 26, 1996 and filed with
the Securities and Exchange Commission on April
29, 1996)
-12-
SIGNATURE
After reasonable inquiry and to the best of my knowledge
and belief, I certify that the information set forth in this
statement is true, complete, and correct.
SECURITY CAPITAL U.S. REALTY
By: /s/ Paul E. Szurek
Name: Paul E. Szurek
Title: Managing Director
SECURITY CAPITAL HOLDINGS S.A.
By: /s/ Paul E. Szurek
Name: Paul E. Szurek
Title: Managing Director
July 1, 1996
-12-
EXHIBIT INDEX
SEQUENTIAL
EXHIBIT DESCRIPTION PAGE NO.
1 Name, Business Address, and Present *
Principal Occupation of Each Executive
Officer and Director of Security Capital
U.S. Realty and of Security Capital
Holdings S.A.
2 Stock Purchase Agreement, dated as of
March 1, 1996, by and among Storage USA,
Inc., Security Capital U.S. Realty
and Security Capital Holdings S.A.
(incorporated by reference to Exhibit 10.1
of Storage USA, Inc.'s Current Report
on Form 8-K dated March 7, 1996)
2.1 Strategic Alliance Agreement, dated March *
19, 1996, by and among Storage USA, Inc.,
SUSA Partnership, L.P., Security Capital
Holdings S.A. and Security Capital U.S.
Realty
2.2 Registration Rights Agreement, dated *
March 19, 1996, by and among Storage USA,
Inc., Security Capital Holdings S.A. and
Security Capital U.S. Realty
3 Joint filing agreement pursuant to 13d-1(f)(1) *
4 Facility Agreement, dated June 12, 1996, by
and among Security Capital U.S. Realty,
Security Capital Holdings S.A., Commerzbank
Aktiengesellschaft, as arranger and collateral
agent, Commerzbank International S.A., as
administrative agent and the financial
institutions listed in Schedule 1 thereto
(incorporated by reference to Exhibit 4 of the
Schedule 13D, dated June 21, 1996, filed
jointly by Security Capital U.S. Realty and
Security Capital Holdings S.A. with respect to
the common stock of Regency Realty Corporation)
_____________________
* Previously filed.
5 Amendment to Paragraph 12 of the Charter of
Storage USA, Inc. (incorporated by reference to Ap-
pendix D to the proxy statement relating to
the June 5, 1996 meeting of shareholders of
Storage USA, Inc., dated April 26, 1996 and
filed with the Securities and Exchange
Commission on April 29, 1996)
