J.P. Morgan Comments On Public Storage's Good Accretion

In a report published by J.P. Morgan, Public Storage

saw good accretion. J.P. Morgan said that, after Wednesday's close, Public Storage announced that Shurgard Europe (of which it owns 49%) bought its partner's 80% interest in two development joint ventures. “The ventures own 72 assets, and while the assets' average occupancy was not disclosed, we understand from management that roughly half of the assets are stabilized and the remaining half are still not stabilized. PSA funded the acquisition for the joint venture ($237 million in cash plus assumed debt) with cash on hand, but terms of the loan (rate, maturity, etc) have not yet been disclosed. Considering its other outstanding loan to Shurgard Europe is priced at 9%, we suspect the pricing of the loan will be more advantageous to Public Storage (i.e., higher rate) than pricing on the loan PSA recently made to its sister-company, PS Business Parks (PSB – N). As the Street continues to be focused on PSA's ability to utilize its dry powder for acquisitions, we see this announcement as marginally positive for the story.” Public Storage closed yesterday at $109.07.