On April 15, 2024, Extra Space Storage Inc. (the “Company”) and Extra Space Storage LP (the “Operating Partnership”) entered into an equity distribution agreement (the “Equity Distribution Agreement”) with BMO Capital Markets Corp., BofA Securities, Inc., Citigroup Global Markets Inc., Jefferies LLC, J.P. Morgan Securities LLC, Regions Securities LLC, TD Securities (USA) LLC, Truist Securities, Inc. and Wells Fargo Securities, LLC, as sales agents (collectively, the “Sales Agents”) and forward sellers, and Bank of Montreal, Bank of America, N.A., Citibank, N.A., Jefferies LLC, JPMorgan Chase Bank, National Association, Regions Securities LLC, The Toronto-Dominion Bank, Truist Bank and Wells Fargo Bank, National Association, as forward purchasers (collectively, the “Forward Purchasers”).
Under the terms of the Equity Distribution Agreement, the Company may issue and sell, and the Forward Purchasers may sell, from time to time through or to the Sales Agents, as sales agents and/or principals for the Company or sales agents for the Forward Purchasers, shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”), having an aggregate offering price of up to $800.0 million (the “Securities”).
The Equity Distribution Agreement replaces and supersedes the previous equity distribution agreement, dated August 9, 2021, in effect with certain of the Sales Agents.
Sales of the Securities, if any, under the Equity Distribution Agreement may be made in negotiated transactions or transactions that are deemed to be “at the market” offerings as defined in Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”), including without limitation sales made directly on the New York Stock Exchange, on any other existing trading market for the Common Stock or through or to a market maker. The Sales Agents, subject to mutual agreement among the Sales Agents and the Company, may also sell Securities by any other method permitted by law, including but not limited to in privately negotiated transactions, which may include sales of the Securities to any Sales Agent as principal (including block trades), as the Company and the Sales Agent may agree. The Sales Agents are not required to sell any specific number or dollar amount of the Securities, but each Sales Agent will use its commercially reasonable efforts consistent with its normal trading and sales practices to sell such Securities up to the amount specified, and otherwise in accordance with mutually agreed terms among the Sales Agents and the Company. The Company has no obligation to sell any Securities under the Equity Distribution Agreement, and, upon giving notice to the Sales Agents, may at any time suspend solicitation and offers under the Equity Distribution Agreement or terminate the Equity Distribution Agreement. The Sales Agents will be paid compensation of up to 2.0% of the gross proceeds from the sales of any Securities sold under the Equity Distribution Agreement. In connection with each forward sale agreement, the applicable Sales Agent, as forward seller, will receive a commission, in the form of a reduction to the initial forward price under the related forward sale agreement, at a mutually agreed rate that will not exceed, but may be lower than, 2.0% of the gross sales price per share of the borrowed shares of Common Stock sold through such Sales Agent, as forward seller, during the applicable forward selling period for such shares (subject to certain possible adjustments to such gross sales price for daily accruals and any quarterly dividends having an “ex-dividend” date during such forward selling period).
The Company intends to contribute the net proceeds it receives from the issuance and sale by the Company of any Securities to or through the Sales Agents and from any forward sale agreement to fund potential acquisition opportunities, to repay amounts outstanding from time to time under the Company’s lines of credit and for other general corporate and working capital purposes.
The Securities will be offered pursuant to the Company’s effective registration statement on Form S-3 (Registration Statement No. 333-278690) previously filed with and declared effective by the Securities and Exchange Commission (the “SEC”) and a prospectus supplement and accompanying prospectus, filed with the SEC pursuant to Rule 424(b) under the Securities Act.
