Business Context and Reporting Period
This Form 8-K was filed by CubeSmart and CubeSmart, L.P. on December 10, 2013. The report discloses the filing of definitive purchase agreements for the acquisition of self-storage facilities entered into on October 28, 2013.
Key Financial Metrics and Transaction Details
- Acquisition Scope: CubeSmart, L.P. (the Operating Partnership) agreed to acquire 36 self-storage facilities in total: 29 in Houston and Austin, Texas, and one in Charlotte, North Carolina (via the HAC Purchase Agreement), plus six in Houston, Texas (via the GJR Purchase Agreement).
- Funding Structure: The acquisitions are expected to be funded by approximately $158.2 million in cash contributed by an institutional joint venture partner, combined with CubeSmart's cash on hand and additional borrowings under the revolving portion of its credit facility.
- Joint Venture: At closing, all but one of the acquired facilities are expected to be contributed to a new joint venture between the institutional partner and the Operating Partnership.
- Financial Performance: The filing text does not provide specific values for revenue, profit, cash flow, margins, or existing debt levels.
Material Changes
The primary material change is the execution of definitive agreements to expand CubeSmart's portfolio by 36 facilities. This represents a significant capital deployment and potential increase in assets under management, contingent upon the closing of the joint venture structure.
Outlook, Risks, and Contingencies
- Contingencies: The transaction relies on the contribution of funds by the joint venture partner and the availability of borrowings under the existing credit facility.
- Documentation: Certain schedules and attachments referenced in the purchase agreements have been omitted from this filing and will be furnished to the SEC upon request.
- Management Commentary: The filing incorporates by reference the material terms previously disclosed in an 8-K filed on November 1, 2013.
Key Facts for Investor Verification
- Verify the total purchase price of the 36 facilities, as the filing only specifies the $158.2 million joint venture partner contribution.
- Confirm the specific terms of the "additional borrowings" under the revolving credit facility required to close the deal.
- Review the omitted schedules and attachments of the Purchase and Sale Agreements (Exhibits 10.1 and 10.2) for potential covenants or conditions precedent.
- Identify the specific institutional joint venture partner contributing the $158.2 million.