SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of The Securities Exchange Act of 1934
Date of Report March 27, 1997
(Date of earliest event reported) (March 27, 1997)
Storage USA, Inc.
(Exact name of registrant as specified in its charter)
Tennessee 001-12190 62-1251239
State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
10440 Little Patuxent Parkway,
Suite 1100,
Columbia, Maryland 21044
(Address and zip code of
principal executive offices)
Registrant's telephone number, including area code: (410) 730-9500
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Item 5. Other Events
Registrant has sold 851,000 shares (the "Sale") of its Common Stock to
Security Capital Holdings S.A., a wholly-owned subsidiary of Security Capital
U.S. Realty ("US Realty"). The shares were sold at $37.625 per share in a
direct placement pursuant to the Registrant's Strategic Alliance Agreement
with US Realty, dated March 19, 1996, pursuant to Registrant's Prospectus
Supplement dated as of March 27, 1997, to a Prospectus dated February 26, 1997,
included as part the Registration Statement on Form S-3 (No. 333-21991)
filed with the Commission on February 19, 1997. The total proceeds of $32
million will be used to repay borrowings incurred under the revolving lines of
credit of SUSA Partnership L.P., the Registrant's operating partnership, to
finance acquisitions of self-storage facilities and for general corporate
purposes. As a result of the Sale, US Realty now owns 10,068,754 shares,
totaling 37%, of the Registrant's outstanding Common Stock.
Item 7. Financial Statements, ProForma Financial Information and Exhibits
(c) Exhibits.
The following exhibits are filed herewith:
Exhibit Description
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8 Opinion of Hunton & Williams, dated March 27, 1997
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SIGNATURE
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.
STORAGE USA, INC.
(Registrant)
Date: March 27, 1997 By: /s/ Christopher P. Marr
-----------------------
Christopher P. Marr
Vice President - Financial Reporting and
Controller
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EXHIBIT INDEX
Exhibit Description Page
8 Opinion of Hunton & Williams, dated March 27, 1997
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Hunton & Williams
951 East Byrd Street
Richmond, Virginia 23219
March 27, 1997
Storage USA, Inc.
10440 Little Patuxent Parkway
Suite 1100
Columbia, Maryland 21044
Storage USA, Inc.
Qualification as
Real Estate Investment Trust
Ladies and Gentlemen:
We have acted as counsel to Storage USA, Inc., a Tennessee
corporation (the "Company"), in connection with the preparation of a Form S-3
registration statement (the "Registration Statement") filed with the Securities
and Exchange Commission on February 26, 1997 with respect to the offering and
sale (the "Offering") of 851,000 shares of common stock of the Company, par
value $.01 per share (the "Common Stock"), to Security Capital Holdings S.A., a
Luxembourg corporation and wholly-owned subsidiary of Security Capital U.S.
Realty, a Luxembourg corporation. The Company will contribute the net proceeds
of the Offering, through its wholly-owned subsidiary, Storage USA Trust (the
"Trust"), to SUSA Partnership L.P., a Tennessee limited partnership (the
"Operating Partnership"), in exchange for an additional limited partnership
interest in the Operating Partnership. The Operating Partnership currently owns,
directly or indirectly, 242 self-storage facilities. You have requested our
opinion regarding certain U.S. federal income tax matters in connection with the
Offering.
The Operating Partnership owns interests in certain
self-storage facilities through the following subsidiary partnerships (the
"Subsidiary Partnerships"): (i) Storage-USA of Palm Beach County Limited
Partnership, a Maryland limited partnership, (ii) SUSA/38th Avenue, Capitola,
L.P., a California limited partnership,
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Storage USA, Inc.
March 27, 1997
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(iii) Clarendon Storage Associates Limited Partnership, a Virginia limited
partnership, (iv) Buzzman Partners I, Limited Partnership, a Pennsylvania
limited partnership, (v) Buzzman Partners II, Limited Partnership, a
Pennsylvania limited partnership, (vi) Tamiami Mini-Storage Partners, Ltd., a
Florida limited partnership, (vii) 441 Mini-Storage Partners, Ltd., a Florida
limited partnership, (viii) Sunset Mini-Storage Partners, Ltd., a Florida
limited partnership, (ix) Southeast Mini-Storage Limited Partners, a Florida
limited partnership, (x) Dade County Mini-Storage Associates, Ltd., a Florida
limited partnership, (xi) Preston Self Storage, Ltd., a Texas limited
partnership, (xii) SUSA Hackensack, LP, a Tennessee limited partnership, (xiii)
SUSA Harrison, LP, a Tennessee limited partnership, (xiv) SUSA Secaucus, LP, a
Tennessee limited partnership, (xv) SUSA Orange, LP, a Tennessee limited
partnership, (xvi) Cole/Morgan, Ltd., a Texas limited partnership, (xvii) SUSA
Nashville, L.P., a Tennessee limited partnership, and (xviii) SUSA Mesa, L.P., a
Tennessee limited partnership.
The Operating Partnership also owns 94% of the nonvoting
stock, and 5% of the voting stock, of SUSA Management, Inc., a Tennessee
corporation ("Management"). The remaining stock of Management is owned by Dean
Jernigan. Management conducts all of the Company's third-party management
business and its sales of locks and storage supplies. In addition, the Operating
Partnership owns 100% of the nonvoting stock of each of Storage USA Franchise
Corp., a Tennessee corporation ("Franchise"), and Storage USA Construction,
Inc., a Tennessee corporation ("Construction"), representing 97.5% of the equity
interests in each such corporation. The voting stock of Franchise and
Construction, representing 2.5% of the equity interests in each such
corporation, is owned by Dean Jernigan.
In giving the opinions set forth below, we have examined the
following:
1. the Company's Charter, as amended and restated;
2. the Company's Bylaws;
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Storage USA, Inc.
March 27, 1997
Page 3
3. the prospectus (the "Prospectus") and the
related prospectus supplement (the "Prospectus Supplement")
contained as part of the Registration Statement;
4. the Second Amended and Restated Agreement of Limited
Partnership of the Operating Partnership, dated as of September 21, 1994, among
the Company, as general partner, and several limited partners, as amended on
March 19, 1996, June 14, 1996, and August 14, 1996 (the "Operating Partnership
Agreement");
5. the Agreement of Limited Partnership of Storage-USA of Palm
Beach County Limited Partnership, dated May 2, 1991, as amended by the Third
Amendment to the Agreement of Limited Partnership, dated June 30, 1996, among
the Company, the Operating Partnership, Franchise, and other limited partners;
6. the Limited Partnership Agreement of
SUSA/38th Avenue, Capitola, L.P., dated June 1, 1995, among
the Operating Partnership, as general partner, and several
limited partners;
7. the Limited Partnership Agreement of Clarendon Storage
Associates Limited Partnership, dated as of November 11, 1994, among Highclar,
L.L.C., a Virginia limited liability company, as general partner, the Operating
Partnership as general partner, Highland Limited Partnership, a Virginia limited
partnership, as limited partner, and the Operating Partnership as limited
partner;
8. the Second Amended Limited Partnership Agreement of Buzzman
Partners I, Limited Partnership, dated May 22, 1996, between among CRM Realty II
Joint Venture, a New York joint venture ("CRM"), the Operating Partnership, as
general and limited partner, and Management, as limited partner;
9. the Second Amended Limited Partnership Agreement of
Buzzman Partners II, Limited Partnership, dated May 22, 1996, among CRM, the
Operating Partnership, as general and limited partner, and Management, as
limited partner;
10. the Amended and Restated Agreement of Limited Partnership
of Tamiami Mini-Storage Partners, L.P., dated as of May 19, 1995, between the
Operating Partnership, as general partner, and the Company, as limited partner;
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Storage USA, Inc.
March 27, 1997
Page 4
11. the Amended and Restated Agreement of Limited
Partnership of 441 Mini-Storage Partners, Ltd., dated as of
May 19, 1995, between the Operating Partnership, as general
partner, and the Company, as limited partner;
12. the Amended and Restated Agreement of Limited Partnership
of Sunset Mini-Storage Partners, Ltd., dated as of May 19, 1995, between the
Operating Partnership, as general partner, and the Company, as limited partner;
13. the Amended and Restated Agreement of Limited Partnership
of Southeast Mini-Storage Limited Partners, dated September 7, 1995, between the
Operating Partnership, as general partner, and Management, as limited partner;
14. the Amended and Restated Agreement of Limited Partnership
of Dade County Mini-Storage Associates, Ltd., dated September 7, 1995, between
the Operating Partnership, as general partner, and Management, as limited
partner;
15. the Agreement of Limited Partnership of Preston Self
Storage, Ltd., dated November 30, 1993, as amended by the First Amendment to the
Agreement of Limited Partnership, dated November 9, 1995, between Peachtree
Development II, Inc., a Texas corporation, as general partner, and the Operating
Partnership, as limited partner;
16. the Limited Partnership Agreement of SUSA Hackensack LP,
dated November 27, 1996, between SUSA New Jersey, Inc., a wholly-owned
subsidiary of Franchise, as general partner ("New Jersey, Inc."), and the
Operating Partnership, as limited partner;
17. the Limited Partnership Agreement of SUSA Harrison LP,
dated November 27, 1996, between New Jersey, Inc., as general partner, and the
Operating Partnership, as limited partner;
18. the Limited Partnership Agreement of SUSA Secaucus LP,
dated November 27, 1996, between New Jersey, Inc., as general partner, and the
Operating Partnership, as limited partner;
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Storage USA, Inc.
March 27, 1997
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19. the Limited Partnership Agreement of SUSA Orange LP, dated
November 27, 1996, between New Jersey, Inc., as general partner, and the
Operating Partnership, as limited partner;
20. the Agreement of Limited Partnership of Cole/Morgan, Ltd.,
dated as of September 13, 1994, as amended by the First Amendment to Agreement
of Limited Partnership, dated as of December 31, 1996, among Jesse B. Morgan,
Cole Partners, Ltd., and the Operating Partnership;
21. the Limited Partnership Agreement of SUSA Nashville LP,
dated October 4, 1996, between SUSA Tennessee, Inc., a wholly-owned subsidiary
of Franchise, as general partner, and the Operating Partnership, as limited
partner;
22. the Limited Partnership Agreement of SUSA Mesa LP, dated
October 17, 1996, between SUSA Arizona, Inc., a wholly-owned subsidiary of
Franchise, as general partner, and the Operating Partnership, as limited
partner; and
23. such other documents as we have deemed necessary or
appropriate for purposes of this opinion.
In connection with the opinions rendered below, we have
assumed generally that:
1. Each of the documents referred to above has been duly
authorized, executed, and delivered; is authentic, if an original, or is
accurate, if a copy; and has not been amended.
2. Each partner (a "Partner") of the Operating Partnership and
the Subsidiary Partnerships (each, a "Partnership") other than the Company and
the Trust that is a corporation or other entity has a valid legal existence.
3. Each Partner has full power, authority, and legal right to
enter into and to perform the terms of the Operating Partnership Agreement and
the partnership agreements of the Subsidiary Partnerships (each, a "Partnership
Agreement"), and the transactions contemplated thereby.
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Storage USA, Inc.
March 27, 1997
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4. Each Partnership operates in accordance with the governing
law of the state in which it was formed and the Partnership Agreement pursuant
to which it was formed.
5. Each Partnership Agreement has remained in substantially
the same form as it was upon the most recent amendment and restatement thereof,
and has not been amended in any material respect (except upon the substitution
of partners in accordance with the terms of such Partnership Agreement).
6. During its taxable year ended December 31, 1997 and
subsequent taxable years, the Company has operated and will continue to operate
in such a manner that makes and will continue to make the representations
contained in a certificate, dated the date hereof and executed by a duly
appointed officer of the Company (the "Officer's Certificate"), true for such
years.
7. The Company will not make any amendments to its
organizational documents or the organizational documents of the Operating
Partnership, the Subsidiary Partnerships, Management, Franchise, or Construction
after the date of this opinion that would affect its qualification as a real
estate investment trust ("REIT") for any taxable year.
8. No action will be taken by the Company, the Operating
Partnership, the Subsidiary Partnerships, Management, Franchise, or Construction
after the date hereof that would have the effect of altering the facts upon
which the opinions set forth below are based.
In connection with the opinions rendered below, we also have
relied upon the correctness of the representations contained in the Officer's
Certificate. We have performed no due diligence and have made no efforts to
verify the accuracy and genuineness of the documents and assumptions set forth
above, or the representations set forth in the Officer's Certificate. However,
where representations in the Officer's Certificate involve matters of law, we
have explained to the Company's representatives the relevant and material
sections of the Internal Revenue Code of 1986, as amended (the "Code"), the
Treasury regulations thereunder (the "Regulations"), published rulings of the
Internal Revenue Service (the "Service"), and other relevant
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Storage USA, Inc.
March 27, 1997
Page 7
authority to which such representations relate and are satisfied that the
Company's representatives understand such provisions and are capable of making
such representations.
Based on the documents and assumptions set forth above, the
representations set forth in the Officer's Certificate, and the assumptions, if
any, and representations in the Prospectus and the Prospectus Supplement under
the captions "Federal Income Tax Considerations" and "Certain Federal Income Tax
Considerations" (which are incorporated herein by reference), we are of the
opinion that:
(a) the Company qualified as a REIT for its taxable years
ended December 31, 1994 through December 31, 1996, and the Company's
organization and current and proposed method of operation will enable
it to continue to qualify as a REIT under the Code for its taxable year
ending December 31, 1997 and future taxable years;
(b) the statements set forth in the Prospectus and the
Prospectus Supplement under the captions "Federal Income Tax
Considerations" and "Certain Federal Income Tax Considerations,"
insofar as they purport to describe the provisions of the laws and
documents referred to therein, are accurate, fair, and complete in all
material respects; and
(c) each Partnership will be treated for federal income tax
purposes as a partnership and not as a corporation or an association
taxable as a corporation or as a publicly traded partnership.
We will not review on a continuing basis the Company's compliance with the
documents or assumptions set forth above, or the representations set forth in
the Officer's Certificate. Accordingly, no assurance can be given that the
actual results of the Company's operations for its 1997 and subsequent taxable
years will satisfy the requirements for qualification and taxation as a REIT.
The foregoing opinions are based on current provisions of the
Code and the Regulations, published administrative interpretations thereof, and
published court decisions. The Service has not issued Regulations or
administrative
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Storage USA, Inc.
March 27, 1997
Page 8
interpretations with respect to various provisions of the Code relating to REIT
qualification. No assurance can be given that the law will not change in a way
that will prevent the Company from qualifying as a REIT.
The foregoing opinions are limited to the U.S. federal income
tax matters addressed herein, and no other opinions are rendered with respect to
other federal tax matters or to any issues arising under the tax laws of any
other country, or any state or locality. We undertake no obligation to update
the opinions expressed herein after the date of this letter. This opinion letter
is solely for the information and use of the addressee, and it may not be
distributed, relied upon for any purpose by any other person, quoted in whole or
in part or otherwise reproduced in any document, or filed with any governmental
agency without our express written consent.
Very truly yours,
/s/ Hunton & Williams
