UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(b) of The Securities Exchange Act of 1934
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Date of Report (Date of earliest event reported) September 17, 1997 (July 23,1997)
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001-12910
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(Commission File Number)
Storage USA, Inc.
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(Exact name of registrant as specified in its charter)
Tennessee 62-1251239
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State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification Number)
10440 Little Patuxent Parkway, Columbia, Maryland 21044
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (410) 730-9500
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Item 2: Acquisition or Disposition of Assets
Storage USA, Inc., (the "Company") consummated during the period May 29, 1997
through September 3, 1997, the acquisition of 9 self-storage facilities (the
"Acquired Facilities") through SUSA Partnership, L.P., a limited partnership in
which the Company is the sole general partner and owns approximately a 91%
interest as of the date of this report. The Acquired Facilities contain
approximately 544,253 square feet, are located in 6 states and were purchased
for approximately $37,633,000 in aggregate consideration.
The acquisition of the Acquired Facilities was funded by cash generated from
operations, the issuance of units of limited partnership interest in the
Partnership, the assumption of certain mortgages payable, cash received on an
exchange of self-storage facilities consummated May 20, 1997 and borrowings
under the Company's lines of credit with The First National Bank of Chicago and
First Tennessee Bank. Each of the Acquired Facilities was used by the seller as
a self-storage facility prior to its acquisition by the Company, and the Company
intends to continue such use of all the Acquired Facilities. The Company's
management determined the contract price of each facility through arms-length
negotiations, after taking into consideration such factors as: the age and
condition of the facility; the projected amount of maintenance costs;
anticipated capital improvements; the facility's current revenues; comparable
facilities competing in the applicable market; market rental rates for
comparable facilities; the occupancy rate of the facility; and the estimated
amount of taxes, utility costs, personnel costs, and other anticipated expenses
associated with the facility.
The following provides certain additional information concerning the Acquired
Facilities:
Location Seller Date of Acquisition
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Ho Ho Kus, NJ Hollywood Industrial Assoc. 7/23/97
Amsterdam, NY Hollywood Industrial Assoc. 7/23/97
Kingston, NY Hollywood Industrial Assoc. 7/23/97
New Paltz, NY Hollywood Industrial Assoc. 7/23/97
Saugerties, NY Hollywood Industrial Assoc. 7/23/97
Raynham, MA Frank Lipauma 7/24/97
Antioch, TN C. Gregory Smith, Jr. 8/8/97
Las Vegas, NV Edward M. Sanders 8/29/97
Lakewood, CO Lakewood Mini Storage, LTD 9/3/97
The following unaudited data related to the Acquired Facilities is derived from
the Company's internal records as of the last day of the month following
closing, or the most current information available:
Square Rent per Economic Physical Total Contract
Location Feet Square Foot Occupancy Occupancy Units Price
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Ho Ho Kus, NJ 124,996 $16.82 91% 93% 1,205 $16,525,000
Amsterdam, NY 28,400 $ 7.01 57% 62% 280 $ 1,455,000
Kingston, NY 54,850 $ 7.92 90% 92% 535 $ 2,500,000
New Paltz, NY 53,040 $ 8.37 94% 97% 620 $ 2,020,000
Saugerties, NY 34,746 $ 8.86 73% 83% 471 $ 2,500,000
Raynham, MA 15,775 $ 8.78 65% 93% 136 $ 475,000
Antioch, TN 78,626 $ 9.62 75% 85% 765 $ 4,800,000
Las Vegas, NV 49,232 $ 7.58 89% 88% 432 $ 2,328,000
Lakewood, CO 104,588 $ 8.50 75% 75% 968 $ 5,030,000
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544,253 $10.37 84% 86% 5,412 $37,633,000
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Item 5: Other Information
On August 27, 1997, the Company entered into a lease agreement (the "Lease") on
a 79,875 square foot self-storage facility in Farmington Hills, Michigan.
Pursuant to the Lease the Company will lease the property for a term of 60
months for a monthly rent of $29,000 during the first 21 months and $30,000 from
month 22 until the end of the lease term at which time the Company will have the
option to purchase the facility for $5,500,000. The lessor has an option to sell
the facility to the Company after the first anniversary of the lease until the
end of the lease term at an initial price of $5,200,000, which escalates over
the lease term to $5,500,000. The Company paid a $1,000,000 deposit on the
facility that will be refunded on the condition that the Company purchases the
facility at the end of the lease term.
On August 28, 1997, the Company announced that Bill J. Razzouk joined the
Company as President and Chief Operating Officer. Mr. Razzouk most recently
served as President of America On Line and prior to that as Executive Vice
President - Worldwide Customer Operations of Federal Express. A copy of the
press release dated August 28, 1997 is attached hereto as exhibit 99.1.
Item 7: Financial Statements and Exhibits
(a) Financial Statements Applicable to Real Estate Properties Acquired
It is impracticable to provide at the time of filing this Report on
Form 8-K any of the financial statements or the additional information
specified by Rule 3-14 of Regulation S-X as required by Item 7(a)(3).
The required financial information and additional information will be
filed by amendment within 60 days of the date of filing of this Report.
(b) Pro Forma Financial Information
It is impracticable to provide at the time of filing this Report on
Form 8-K any of the pro forma financial information required pursuant
to Article 11 of Regulation S-X as required by Item 7(b)(1). The
required pro forma information will be filed by amendment within 60
days of the date of filing of this Report
(c) Exhibits
Exhibit Description
99.1 Press Release, dated August 28, 1997
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DATED: September 17, 1997
STORAGE USA, INC.
By: /s/ Dennis A. Reeve
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Dennis A. Reeve
Chief Financial Officer
(Principal Financial and Accounting Officer)
News Release
Contact: Dean Jernigan
Chairman & CEO
Storage USA, Inc.
(901) 252-2000
For Immediate Release
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Bill Razzouk Named President and COO of Storage USA, Inc.
MEMPHIS, Tennessee (August 28, 1997) -- William J. Razzouk, 49, has
been named president and chief operating officer of Storage USA, Inc.
(NYSE:SUS), operator and franchiser of more than 300 self-storage facilities in
31 states and the District of Columbia.
Razzouk joins Storage USA after a lengthy career in executive
management with a number of corporations, most recently America On Line and
Federal Express Corporation. He served as president of AOL and Executive Vice
President - Worldwide Customer Operations of FedEx. While at Federal Express, he
was responsible for planning and executing all sales marketing operations and
customer service functions internationally, responsibilities that accounted for
approximately 100,000 employees.
"Bill Razzouk helped take FedEx from operations in two countries to
operations in more than 200," said Dean Jernigan, chairman and chief executive
officer of Storage USA, "and we look forward to the same kind of executive
vision and leadership from him. I cannot overstate how pleased we are that he is
joining us."
In addition to assuming the presidency of Storage USA, Razzouk will
serve on the company's board of directors. He is also a director of La Quinta
Inns, Inc., a San Antonio-based hotel chain.
Razzouk said that his immediate challenge will be to continue the
exceptional, profitable growth levels Storage USA has enjoyed and to ensure that
it retains its market differentiation by continuing to provide a much higher
level of customer service than is common within the industry.
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"The self-storage market has been highly fragmented and is in the early
stages of consolidation," Razzouk said. "To successfully participate in this
consolidation requires our on-going focus on finding the best properties,
growing our body of well trained and dedicated managers, and providing the best
levels of service to our customers."
Razzouk, a graduate of the University of Georgia, is married and
resides with his wife and three children in Memphis.
Storage USA is a fully integrated, self-administered and self-managed
real estate investment trust with principal offices in Memphis and Columbia,
Maryland. The company is engaged in the management, acquisition, development,
construction and franchising of self-storage facilities.
Of its current total of 328 self-storage facilities in 31 states and
the District of Columbia, the company owns 297 and manages an additional 31.
Cumulatively, this represents 22 million square feet of storage space, of which
20.1 million is company owned and 1.9 million is under management contract. In
addition, Storage USA has 21 self-storage facilities in development or
construction, which will add another 1.5 million square feet of storage space.
More information, including quarterly and annual financial data and a
property database, may be obtained through the company's web site at
http://www.sus.com.
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