National Storage launched a joint venture with state pension fund Heitman Capital Management to secure the acquisition of 66 self-storage facilities comprising 4.5 million square feet in 12 states. iStorage currently has an 86 percent occupancy rate, with the average rent per square foot of $12.24. The largest geographic concentration of iStorage's portfolio is in Florida, with 21 facilities.
"Management is confident that it can further increase rent levels and increase ancillary income from the portfolio," said Jefferies in a recent analyst note.
National Storage will hold a 25 percent ownership interest in iStorage, with Heitman Capital Management retaining the remaining 75 percent.
Jefferies upgraded its rating on National Storage to a Buy rating and upped its price target to $24 from $22.
"Subsequent data released by NSA on the deal reinforces our view that the transaction is accretive, adds an additional growth driver, demonstrates NSA's ability to further grow its platform and could eventually lead to a unified brand," wrote Jefferies.
At time of writing, National Storage was up 3.80 percent on the day at $20.51.
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